Carriers Taking Zones South

<B> Carriers Taking Zones South</B>

By Lauren Bielski

With the open doors of the North American Free Trade Agreement inducing more U.S.-based groups to head south of the border, American and Continental Airlines are expanding their routes--and their meeting discounts--to the Caribbean and Latin America, respectively.

Giving more play to an already popular region, American, which previously rolled out competitively priced zone fares to U.S. islands in the Caribbean (<I>Meetings Today</I>, June 24, 1996), is now extending those fares to all 30 destinations it flies to there.

Meanwhile, in a program scheduled to launch in May or June, Continental will highlight new service to Latin America--including recent additions from Houston to Veracruz and Tampico, Mexico--by offering additional discounts on group fares to its 12 new destinations through Nov. 30.

Adding 5 percent more to its existing discounts, this special offer will boost the unrestricted discount to 15 percent, and all other discounts to 10 percent. The percentage can be piggybacked on the 60-day advanced purchase discount the carrier rolled out last summer (<I>Meetings Today</I>, Aug. 25, 1997).

Continental--the second largest carrier in the race to claim emerging South and Central American markets--said its goal is to serve 21 countries and 39 cities in Latin America and the Caribbean, with more than 400 non-stop flights, by July.

Although American plans no additional discounts at this time, use of the zone fares continues to climb, said group meeting sales product manager Glenn Orcutt. The extension of fares to destinations where American is the only game in town should result in even higher demand for both the product and the place.

"The Caribbean continues to be a really popular choice for high-end sales meetings and incentive travel, so we think this will be well received by the market," she said.

Cindy Fulton, assistant manager of the group department at Arrington Travel in Chicago, said that greater application of zone fares is a great idea, though she simply wants a stepped up flight schedule to the region.

"If American does anything to increase flight schedules to the Caribbean, I'd say yippee, because there isn't enough lift to support even midsize groups there. I think they should make that a priority."

Otherwise, Fulton said, she finds American great to work with, and even willing, in a few instances, to waive some restrictions to get her business.

But Continental isn't taking any chances on filling its planes, even though it has seen demand go up enough in the last two years to justify 40 percent more seat miles in 1997 and an additional 40 percent in 1998.

"We're offering the discounts to familiarize planners with new destinations on our schedule," said manager of groups and incentive travel Brenda Davis. "Of the flights we already run, Caracas is particularly well traveled by groups, and Santiago is also very popular. We think once planners become aware of the new routes, they'll also fill up."

Continental now serves 14 Mexican destinations, every country in Central America and five destinations in South American, she said.

The discount rollout coincides with a broad-spectrum of service enhancements, said Karla Villalon, Continental's spokesperson for Latin American markets. The carrier has invested more than $1 million in this project, which will provide bilingual staff, airport signs and flight information; regional in-flight cuisine; and cultural awareness training for flight attendants.

For meetings buyers, the news of the discounts comes at a time of mixed signals, in which they have been frustrated by both the service levels and the available discounting opportunities in the air travel market (<I>Meetings Today</I>, March 16). Although carriers are managing inventories with increased precision, making discounts harder than ever for planners to negotiate, they also view any discounts they do offer as real concessions.

Even in this environment, though, Davis still sees ample opportunity for meetings buyers and carriers to work together to find a price with which both parties can live.

Corporate meeting planners "are definitely beginning to think out of the box to find better ways to use the pricing options that we do offer to their best advantage," according to Continental's Davis, "and coordinating their air and hotel purchases more efficiently for the best overall discount.