Planners Use Discount Airlines

<B> Planners Use Discount Airlines</B>

By Lauren Bielski

The major airlines may be enjoying strong load factors and the fruits of more sophisticated yield management, but they have yet to share the wealth in the form of significant discounts with corporate meeting buyers. As a result, meeting attendees are more likely to find themselves flying a low-fare carrier than ever before.

Of the 218 meeting managers who responded to Business Travel News' latest Meetings Monitor survey, only 19 percent reported receiving greater discounts in 1997 than they did in 1996, and 29.9 percent received less. Slightly more than half said that the discounts they did receive--typically 5 to 10 percent off the lowest published fare--were about the same as the deals they penned in 1996.

"Get a discount from the major carriers? I can't even get them on the phone," said Jan Willbanks, owner of Connections!, a third-party meeting planning service based in Redwood City, Calif.

Perhaps not surprisingly, corporate meeting buyers are turning in greater numbers than ever before to low-cost carriers in the quest to keep their groupbudgets in line. Of the 218 planners polled, almost half (49 percent) said they had used a low-cost carrier like Southwest for a meeting in 1997, compared with only 28.8 percent who responded affirmatively when asked that question in 1994, for example.

In fact, about 25 percent of respondents said that they worked with low- cost carriers to support a meeting program for the first time in 1997.

Like a number of respondents, Willbanks, whose company handles travel and meeting planning for many technology companies in Southern California, complained of a lack of responsiveness and a general lack of professionalism among many of the major carriers she dealt with last year. "They could learn a lot from some of the regional carriers, who were just so responsive and on top of things, believe me," Willbanks said.

She said that while in the midst of planning a U.S.-based meeting that will pull in international guests, she has been waiting no less than a week to hear from one carrier, while another was unhelpful. The agent of record for the group was also of little help.

To expedite pretrip planning, Willbanks has turned instead to internationally based carriers to bring her European and Asian-based attendees in, giving her better rates--and better service--particularly on routes from Asia.

She contrasted this experience with air negotiations she completed in 1995 for a U.S.-based group headed for Japan. Then, "All the carriers and all the agencies were knocking themselves out to make the program work, and they were good with upgrades," she said. "I don't know what accounts for the difference--maybe business is just too good now."

Last year, Hawaiian and Alaskan Airlines made a particularly good impression with the disgruntled planner, as did Continental, which set up one of her programs so that travelers booking flights could announce what baseline discount they were entitled to, and the booking agent would check to see if there was something cheaper available.

Tammara Weall, an agent with The Travel Business in Moline, Ill., said that, in her experience, TWA is the most attractively priced and responsive carrier in her region, but even it is offering discounts only in the 5 to 10 percent range. "American Eagle and United Express are forced to be competitive in Chicago, but not in the quad cities," Weall said. "They figure that they've got a core of customers who will drive to Chicago to get their frequent flyer miles or a more advantageous schedule."

Weall has more corporate travel business than corporate meetings, but when she is looking for group discounts, she primarily negotiates based on the particulars of the meeting in question.

So does Mish Hancock, with Anixter, a networking integration firm headquartered in Skokie, Ill. Hancock and the senior level management at Anixter clock in a lot of flight time on the transient side, but still have far less corporate meetings than individual travel. Still, she doesn't feel that she can make promises to carriers about delivering corporate travel market share, and instead opts to keep her meeting and transient negotiations separate.

What Hancock is doing differently is shopping around on the Internet to get some sense of what's being offered by the carriers in her region. She also has used zone fares from America West for one of two large managers' meetings held last year in Arizona.

"I like using zone fares--they're pretty easy to work with and the discounts add up over time," she said.

In the absence of hard discounts from the major carriers, many planners simply have settled for the little perks and soft-dollar savings that can make them heroes in the home office.

Twenty-seven percent of respondents said they received free upgrades, and 24 percent said they still obtained a free ticket for every block of 40 tickets purchased. More than 20 percent said they negotiated use of a free club or meeting room, and 20 percent said they got free drinks.

Not everyone, of course, feels summarily dismissed by carriers. Laura Wilkin, former supervisor of events and travel for Franklin Templeton Group (who recently was promoted to a different area), said that she always felt fortunate to get the deals she did with carriers, given her company's size.

"The company is in the midst of negotiating its new preferred vendor agreement with United, which is a primary carrier out of San Francisco. I don't know what '98 contracts look like because I'm no longer involved, but I do know that in 1997, we received decent front-end discounts often coupled with back-end rebates," she said.

She said that United was open to negotiation because it was trying to look beyond next quarter's profits, and that her company's growing travel profile--and net employee increase thanks to a series of acquisitions--gave it additional negotiating clout.

Pat Hanson, assistant to the president at FOJP Service Corp., a risk management and insurance company in the greater New York metro area, said she also does reasonably well with carriers for about eight staff meetings plus several international board meetings she handles annually.

"I've been working with the same travel agent for 10 years and her service has been impeccable. She even handles the leisure travel of our chief executive officer," Hanson said. "Every year she sits down with the carriers that fly to our destinations and tells them what's scheduled for us. We have the benefit of advance booking, plus we get discounts based on her relationships. I'm satisfied with the fares." While she wouldn't necessarily characterize the airlines as tougher than usual in negotiations, she does think that they have backed away from free tickets as a reward for volume. "But they still allow upgrades, which is what my people value the most," she said.