Lower earnings among major U.S. airlines have led some carriers to resurrect revenue-generating strategies — I call them “segmentation tactics” — that essentially penalize business travelers more than other travelers.
Among these strategies is, as Joe Sharkey at The New York Times describes it, “the Saturday night stay,” which requires an overnight on Saturday evening in order to score a cheap airline fare.
These flights are the kind populated by business travelers, who hate rules that, in effect, force them to spend the whole weekend on the road.
These “minimum stay requirements” are meant, Sharkey explains, “to discourage business travelers from buying the cheaper fares.”
How widespread is it?
Well, according to an article at Bloomberg.com, “United is requiring Saturday-night stays in about 65 percent of markets it serves … That means higher fares for business travelers who don’t spend weekends on the road.”
In the bad old days, The Times’ Sharkey notes, “back when major airlines did not worry much about low-cost carriers, unrestricted business fares could cost three times or four times an advance-purchase leisure fare.”
Not long ago this business traveler-unfriendly policy had come back from the dead among the major U.S. carriers, at least on some less-competitive, secondary routes.
Now it seems this secondary-route strategy is becoming more of a mainstream strategy among the majors as the rising cost of fuel squeezes airline profits. The Wall Street Journal reports that Delta Air Lines is taking buyback, layoff, and selloff steps to deal with its rise in operating costs.
In fact, segmentation tactics that apply Saturday stay and three-day stay restrictions seem to be becoming common in certain network carriers’ fare structures. Needless to say, it’s one element in a revenue management effort by those airlines to segment markets, flights, and customer types to a much greater extent than ever before.
One of these tactics embraces ticketing restrictions that increase the penalty charges for travelers who make changes to airline tickets. Naturally, business travelers are the ones whose travel plans fluctuate the most.
Normally, a business traveler would weigh the tradeoff between penalties that would be charged if they have to change their ticket vs. buying a higher-priced, less-restrictive ticket right up front.
An example of the new ticketing restrictions: United Airlines recently announced that it was increasing its penalties from $100 to $150 for ticket changes. This would not only generate more revenue if a business traveler has to make changes to his itinerary, but would also make him re-think or consider buying the less-restrictive (but higher-priced) ticket from the get-go.
Overall, airlines are unbundling their fares and fare choices and transitioning in a hurry to an à la carte business philosophy that restores choice to travelers.
The upside is that travelers won’t have to pay for what they don’t want.
The downside is that things which used to be “free” will be pay-for-play, including many services popular with business travelers:
* Access to airport lounges.
* On-board food and meals.
* Premium seating locations, including seats with extra legroom, in the front of the plane, and with powerport access.
US Airways Group, Inc. on April 16 said it will begin charging $5 or more to fliers who prefer
to ensure they get a window or aisle seat in the first several rows of coach.
Add to these restrictions the fact that business travelers will have to reckon with fewer flights as a result of rising fuel prices and potential airline mergers.
Jet fuel prices have risen 80 percent in the last year, so I guess it’s no surprise that U.S. airlines have been adding fees, boosting fares, and cutting capacity to cope.
Unfortunately, the road warrior is bearing the brunt of those coping tactics, like the Saturday night stay.
Are you worried about road warrior unfriendly-rules trickling back in?
What do you think it all means for the business traveler?
Road Warrior • Miami • www.amadeus.com