The introduction of JetBlue Airways' first corporate meetings product underscores the continued viability of such offerings for buyers, analysts and buyers said, even as fare-reform initiatives and some airlines' discontinuation of the programs have limited their utility. Even with restrictions that include minimum booking lead times, some buyers have found a place in their programs for the discounted meetings products, particularly when using nonpreferred carriers or booking infrequently used destinations.
JetBlue's program, announced late last month
(Meetings Today, April 2), is similar to those of most major carriers, with one key difference: CompanyBlue Meetings does not include a flat public discount off published fares, as does every other similar program. Buyers must call the airline or go to its Web site in order to receive a customized discount, if any. To qualify, a corporate meeting buyer must schedule business-related travel for at least 15 corporate employees to the same destination.
"The only request that we make is that there is at least some central date that the majority of the group is traveling in, but we absolutely will accommodate those deviations," said Chad Meyerson, manager of group sales and meetings of JetBlue. "We give them flexibility all the way up until departure to be able to make those deviations as well. If you've got 100 people traveling on certain dates, there's an excellent chance, especially in a market like the Caribbean, that someone's going to want to come early and someone's going to stay late."
JetBlue's decision to join the ranks of carriers that offer public meetings programs stands in contrast to other carriers' actions in the past few years—namely, Southwest Airlines' decision to eliminate its program in 2003
(Meetings Today, Dec. 8, 2003), and Delta Air Lines, which followed in 2005 as part of a fare-reform initiative
(Meetings Today, Jan. 17, 2005). Kevin Krone, Southwest's vice president of marketing, sales and distribution, this month reiterated to Meetings Today that Southwest had no intention of bringing its meeting program back.
"We did have a meeting program and we did discontinue it a few years ago," Southwest's Krone said. "We took a deep look at that, and basically what we discovered was we had a lot of meetings business that wasn't flowing through the meetings program. It ended up being a way that, in the interest of being efficient and cost-effective, we felt like we could provide the service but not have the overhead. There's nothing right now that would make us reconsider that we would need to officially have a meetings program."
Krone said that buyers could book meetings either through Southwest's Web site or its Swabiz corporate booking tool. "We want Swabiz to be a low-cost, easy-to-use, high-value product for our corporate accounts, and meetings is just one of the utilities it can have," he said.
Despite Southwest's stance, JetBlue's Meyerson said the program is a good prospect for the company. "Our perspective is that we're not really sure what the rationale behind cutting these programs was. We feel like going after these business groups and business travelers is a great opportunity. For us, it's an incredibly attractive piece of business," he said.
Many buyers would agree. While most still use preferred airlines that offer discounts through corporate contracts, a meeting discount program can provide better pricing, even from the preferred vendors themselves. The programs became especially attractive after airlines limited contract discounts as part of reform initiatives that lowered domestic airfares, said Bill Davidson, manager of corporate travel and meeting services at Austin, Texas-based International Sematech.
"The first thing to go in many cases was the domestic discount," Davidson said, "so we started to really take a closer look at the meeting fares, because in some cases that discount exceeded my own corporate arrangement. It began to make a lot more sense to take advantage of that whenever it applied. We actually did that quite a bit."
Reasons for using the discount programs can vary. While cost can be a big determining factor, other factors can include the prominence of a certain airline location of the destination. Julie Merken, a senior planner for Federal Way, Wash.-based Weyerhaeuser, used American Airlines for a meeting in Dallas last September.
"It was cost-effective because it was an airline that was not one of our preferreds. Our meeting was in Dallas, and because Dallas is American's hub, they pretty much own the skies there and have the most direct flights into that location," she said. "We knew going into Dallas that the easiest airline to go with would be American."
While working with a different airline can be a cut-and-dried affair, trying to get better rates within a preferred airline can be an aggravating experience. Davidson tried to work the meetings program fares into his contract with a preferred airline rather than have to book each meeting individually, but was told the two programs couldn't be consolidated.
"The meeting fares and the corporate contract are completely two separate entities handled by two separate groups of people within their organization. Essentially, the answer back to me was, 'If you want to continue to get the meeting fare discount, you have to continue to set up each of those individual meetings.' But we would just do them over and over again because we had so much stuff going on out there. It was a little frustrating," he said.
For most buyers, whether to use preferred airlines' contracted rate or a meetings program rate is based on what the best deal will be for the company. "It tends to be something that we negotiate. We're looking across all airlines to see which deal will be better, compare that with corporate rates and so on and so forth, so it's really a mix-and-match approach," said Yvonne Long, senior vice president of third-party group air provider Air Fulfillment Services.
While JetBlue's program still is in its initial stages, the industry is interested to see how the program will pan out.
"We would absolutely take a look at it because JetBlue has now opened up some of their services in Austin, which of course is our primary outbound location," said Sematech's Davidson. "It makes sense that if we're having a meeting in a city that they serve, then absolutely we would look at that."
JetBlue sees CompanyBlue Meetings as a way to increase their attractiveness with corporate travel buyers and compete with legacy carriers. "We recognized it was a brand-new market for us, so most of the development process was talking with meeting planners: getting their feedback on what issues were important to them, how their current processes worked, what they would like to see changed," said JetBlue's Meyerson, whom the carrier hired one year ago to develop CompanyBlue Meetings.
Among JetBlue's offerings are allowing free and unlimited passenger name changes, holding seats for two weeks without a deposit if travel is more than 60 days out and waiving the $30 change fee for changing up to 10 percent of booked seats.
"The interesting part about the industry was that a lot of meeting planners had very different priorities based on their position and based on their roles," he said. "Some really were interested in the incentives in terms of tickets, credits and things like that, while there other meeting planners didn't really care so much about the perks and incentives as much as just having an airline that would work with them."