<B> Air Progs. Go Global</B>
By Chris Davis
Though still hindered by antitrust concerns, the international airline alliances are beginning to address the needs of the U.S. group market for global meeting products.
American Airlines last month introduced a meetings discount of 5 percent off the lowest published fare of any transoceanic AA flight that originates in the United States and connects with an overseas Oneworld alliance member, including British Airways, Cathay Pacific Airways, Iberia and Qantas Airways. The discount applies to groups of 10 or more traveling to the same destination, though they can take separate flights from separate origination points.
Delta's Atlantic Excellence alliance already offers an international group discount, and United's Star Alliance plans to roll one out before year's end.
The new American discount is less a Oneworld-wide meetings program than it is American, by itself, offering savings off its portion of the codeshare flight. American doesn't have immunity from federal antitrust laws with its overseas Oneworld partners, and therefore the carriers are prohibited from establishing a unified pricing agreement.
"Basically, American will absorb the cost on our side. If we're the transoceanic carrier, we garner a greater overall share of the ticket price--and we'll pay the cost to give people an incentive to fly us," said George Coyle, AA's product manager for group and meeting travel. "The key is that American has to be the transoceanic carrier, because since we don't have antitrust immunity, we can't talk about pricing, or anything else that might be an antitrust issue, with the other Oneworld carriers."
Bill Boyd, president and CEO of Sunbelt Motivation & Travel of Dallas and former president of Meeting Professionals International, said he had expected more focus on the group market by this point from the alliances, but welcomed any relief from the high fares in Europe. "Intra-European fares are wild, very expensive, and anything they can do to lower them is welcome," he said. "If we can get a discount on a carrier that's codesharing with American, we'll do it in a heartbeat."
For AA, though, expanding the program to codeshare partners without antitrust immunity is an issue. "We have zone fares to Europe, but they are only applicable to American's destinations, primarily because we can't sit down and work out a zone product with Oneworld because we don't have antitrust immunity," Coyle said. "We have a lot of grand ideas about what we'd like to see in an international Oneworld meetings product, but we can't and won't engage in any conversation that would hurt American."
American has antitrust immunity only in its relationship with Canadian Airlines, the only Oneworld partner excluded from the new meetings discount.
Both Delta Air Lines and United Airlines enjoy some measure of antitrust immunity in their Atlantic Excellence and Star alliances, and both have or plan to introduce alliance-wide meeting programs. The Star Alliance plans to introduce a meetings product later this year that will not restrict which carrier flies attendees over the ocean, said United's director of association sales Joann Bedrosian Ryan. United has antitrust immunity with Star partners Air Canada, Lufthansa and SAS, but not with Thai International or Varig Brazilian.
"Wherever you live, you will be able to take a discount on United or the alliance carrier, so we're not forcing them to use United as the transocean carrier," Ryan said. "We'll put out a product that is our global meeting program, inclusive of any of the Star Alliance carriers."
The Atlantic Excellence Alliance, in which Delta has immunity with Austrian Airlines, Sabena and Swissair, rolled out a global meetings program last summer (<I>Meetings Today,</I> July 20). Any of the four airlines can negotiate deals for all carriers, and attendees can call any of the four for all arrangements.
Northwest Airlines and KLM, which have antitrust immunity, also have a fully integrated group program. "Any product that we have applies to KLM, including zone fares," said Gail Bill, senior manager of meeting and incentives sales. "Anything that is booked on KLM from North America now is contracted out of Northwest, so everything that applies to us applies to KLM."
Northwest recently aligned with Continental Airlines, which has no antitrust immunity with any airline, though it is part of the Wings alliance with Alitalia and KLM, and partners with Air France and Virgin Atlantic. "We have hard-block agreements with partners in which we control a portion of the seats on each flight as if they were ours," said Continental manager of groups and incentive sales development Brenda Davis. "We can negotiate group discounts, but we do all of our group pricing on an ad- hoc, case-by-case basis." Without antitrust immunity, Northwest and Continental will be hard-pressed to come up with a unified meetings product. "We want to have a seamless process, but we're still working on what this all means," Davis said.