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CNN Live Saturday

Airlines Are Cutting Ticket Prices for Business Travelers

Aired August 11, 2001 - 15:15   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DONNA KELLEY, CNN ANCHOR: And now to travel. If you think you can't afford to fly away for a summer vacation, think again. With the downturn in business travel, airlines are offering cheaper rates and are even dropping the mandatory Saturday stay-over. For more on this, we're joined by David Field. He's the Americas editor of "Airline Business" and has covered the airline industry for 20 years.

Mr. Field, hello.

DAVID FIELD, EDITOR, "AIRLINE BUSINESS": Hi.

KELLEY: Is this Saturday stay-over for everybody for every city? I'm looking to see -- and it looked like maybe it was Chicago they are starting first?

FIELD: No, the sales start from Chicago. This sale is very much a Chicago phenomenon. It was started by United, which has seen a real bad slump in business travel on its big trunk routes between Chicago and eight business centers -- Seattle, San Francisco, Denver, New York, Boston, and so on.

It's spreading, and it may spread beyond just O'Hare routes. It started with O'Hare, it started with United. It was matched by United's archrival at O'Hare, American, but it has been picked up by the other three major carriers -- by Delta, by Northwest, by Continental -- and it's probably a very good idea to watch the papers on Monday morning and see if it has become a truly system-wide sale.

It is, however, a sale on really important, really big routes. It's no's a beach to beach sale, but it's definitely a briefcase sale. There are a lot of places you can go if you're looking for a leisure trip as well.

KELLEY: OK, so, when you say "briefcase sale" -- I was reading about that. Explain to folks what that means when you say briefcase.

FIELD: It's aimed at business travelers. It's aimed at the people who traditionally buy as little in advance as possible, and end up paying the highest fares, because they can't always plan very ahead, and they go from business center to business center, such as Chicago to Washington, D.C., neither of which is exactly a beach resort.

And on these kind of routes, people are spending $1,000 to $1,200 for a last-minute one-way fare. This has brought it down to $300, $400 level, if you buy seven days out. Seven days is not that far ahead.

(CROSSTALK)

KELLEY: Yeah, seven days in advance, and we have an example of that, in fact, a nonrefundable seven-day advanced purchase, as recently as mid-May, round-trip without a Saturday night stay-over, which is the big deal that they are talking about, $832 between Los Angeles and Chicago. United's new discount fare for selected flights on that route -- and always read the fine print, as you probably would say -- also without a Saturday stay, now 376. So it's huge savings if you can get in there and get them.

FIELD: It's a huge savings. But look at the people it's targeted to, it's targeted to the people who have been avoiding the airlines most assiduously. It's been targeted at people who work for companies with corporate travel departments that don't want them to travel, because the airlines have simply priced themselves out of that market. This is in some sense...

(CROSSTALK)

KELLEY: Because the economy has slowed down? Is this why -- is this why they made the cutback?

FIELD: That's right. That's right. The economy started to slow down, and airline fares kept increasing. Airline fares did not slow down the way the economy slowed down. Airlines have been hit with much higher fuel bill this year and with higher labor costs, and they've passed these on to buyers.

KELLEY: You think this will last?

FIELD: Finally, the airlines are beginning to realize that there is a certain amount of resistance -- after a certain level, folks will not buy.

KELLEY: You think this will last for a while?

FIELD: This may last. This is so far an open-ended sale. There is not an end date on it. Usually, when there's a sale, it says buy by September 19, last day of travel December 1. This does not have a last day on it. It could be a long-lasting basic structural change in air fares. We will just have to wait and see how many other airlines match it, how many other airlines pick up on it.

KELLEY: OK. We'll watch it with you. David Field, who is the editor of "Airline Business," thank you.

FIELD: Thank you.

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