Burned by bargain fares, airlines once again offer luxury to the commercial traveler. But this time, it's on demand.
By JEAN HELLER
Published March 12, 2004
These days, the right flight can make a big difference. A power port to plug in a laptop or DVD player, an Internet and e-mail connection, movies, music, and live television on demand.
Not to mention seats that lie flat - 180 degrees - and make into a bed.
In an effort to lure back full-fare business travelers, some airlines are pulling out all the stops to add amenities they hope will prove irresistible.
It's no longer just meals and drinks, but the means to run personal electronics, adjustable headrests and footrests and new telephones that offer callers privacy. Even interactive computer games passengers can play with others on board.
In one case at least, an airline is making an effort to give front-of-the-plane perks to those flying on full-fare tickets in the back.
"We want all of our customers to be comfortable, but we're directing a lot of effort toward the full-fare coach customers who tell us that if they're going to pay more, they want to get more in return," said Rasheed Johnson, spokesman for Continental Airlines.
In the immediate aftermath of the 2001 terror attacks, the nation's airlines desperately needed to bring passengers back - any passengers, with any class of tickets and any type of fares.
Filling seats became imperative.
As carriers continued to hemorrhage cash, forcing some into bankruptcy, it became clear that they really needed to reach out to business travelers. They pay higher fares for their often last-minute flights and provide high profit margins for airlines.
But in the two years that followed the attacks, many businesses learned to cope without extensive travel, and many businesses pressed employees to plan trips ahead to take advantage of discount fares the airlines intended for leisure travelers. In a difficult economy, business travelers became a hard sell.
Passenger counts actually began falling with the economy months before the terrorist attacks of 2001, but the hijackings accelerated the trend. The nation's air carriers racked up financial losses for 2001 and 2002 totaling $20-billion. Even with federal loans to ease the burden, they were reluctant to spend a dime they didn't have to.
For the most part, in-flight food disappeared. So did other amenities, depending on the airline, such as extra leg room in coach, free entertainment, magazine subscriptions and free newspapers. Even pay-by-the-drink liquor service dried up.
The reason for the belt tightening was obvious. A survey taken by the Business Travel Coalition in 2001 before Sept. 11 found that businesses planned to cut their corporate travel by 28 percent.
"They told us that the cuts would be more or less permanent," said Kevin Mitchell, who heads the coalition, an organization that follows trends in business travel.
During the boom of the '90s, business travelers accounted for 40 percent of the airline seats sold, but generated 60 percent of airline passenger revenue. By the late '90s, when ticket prices were high, business travelers still accounted for 40 percent of the traffic, but they accounted for 70 to 75 percent of the revenue, Mitchell said.
"Now, business travelers account for 30 percent of all travelers and 50 percent of the revenue," Mitchell said. "It's important for airlines to get that traffic and that revenue yield back."
To do that, Continental, the only major carrier that didn't cut amenities after 2001, is offering more to full-fare coach customers. They get a no-middle-seat guarantee. They can use expedited security lanes, board whenever they want, use the first-class check-in lane and get free upgrades to first class on a seat-available basis.
They even get special bag tags so their checked luggage is first to reach the carousel.
Power ports, which Continental began installing several years ago, are available in first class and, on wide-bodied jets, in the first rows of coach.
Food is making its comeback in all classes of many airlines. It is no longer free, but the quality is better, carrying the brands of such well-known establishments as the Atlanta Bread Co., Vie de France, Wolfgang Puck, the Hard Rock Cafe and T.G.I. Friday's. Depending on the meal, prices range from $2 to $10.
Food is a rare amenity whose costs aren't buried in the ticket price. Another will be the use of Web servers and e-mail that some airlines, including United and Lufthansa, will offer on international flights. Service will cost about $35.
The jury is still out on whether customers will be willing to pay the cost of such conveniences. So far, the pay-to-eat idea has been successful, whether the food is sold in the gate or in the sky, but some passengers still bring their own food aboard. Those who don't want to pay for high-tech communications can opt out of that, too.
"Some passengers won't go for (the extra goodies) and will continue to shop around for the best ticket prices," said Bill Oliver, an aviation consultant with the Boyd Group in Colorado. "But it has been proved that carriers can successfully charge premiums for some amenities."
For example, large established carriers often have a network of routes that most of the low-fare carriers don't. Passengers have shown they are willing to pay a little more to avoid changing airlines in mid trip, Oliver said.
"If you're flying from Baltimore to San Jose, you're going to be willing to pay a little more for some frills," he said. "Not $50 per segment more, but $50 for the round trip won't faze most passengers. If you're flying from Tampa to Atlanta, probably not."
George Belson of Salt Lake City, an Internet technology consultant who says he thinks of himself as a constant flyer instead of a frequent flyer "because I'm in the air constantly," says he will take amenities anywhere he can find them.
"When you're up there as often as I am, the seats, the food, the electronics all become important," said Belson, who was at Tampa International Airport on his way to Atlanta.
And Belson is willing to pay a premium "because my clients foot the bills," he said, then added, "But I'd probably still pay if it was my own dime."
Northwest Airlines offers enhanced food service on its new Airbus A330-300 wide-body aircraft on overseas flights. Customers in business class get seats that recline to 176 degrees and state-of-the-art video programming. Coach passengers get the videos on 6.5-inch screens in every seatback.
All of it is on demand, meaning the sports, movies, games and shopping can begin whenever the passenger is ready. And new coach seating insures that no one is more than one seat from an aisle.
International business-class passengers on Delta Air Lines also get expedited boarding, access to special BusinessElite lounges, personal telephones and console space that acts more like a desk than a simple tray table.
Some domestic low-fare carriers, once known for cheap seats and little else, have bowed to the need to give passengers more.
Last month, JetBlue Airways, which pioneered satellite television at each seat in its planes, said it would provide 100 channels of satellite radio, movies and Fox TV shows, as well. The next day, AirTran, another low-fare carrier, said it also would install satellite radio.
One major carrier that has not jumped into the competition is Southwest Airlines.
"We're always evaluating our choices," said spokeswoman Christine Turneabe-Connelly. "Whether we go for any of that depends on what it will do to our cost structure. We're particularly concerned about whether it is something the customers really want, how expensive it is, and what it will do to our fares."
The vast majority of Southwest operations are short-haul flights, on which distractions might not be as important.
"Certainly, on the handful of our three-hour flights customers might like to have entertainment, but there aren't specific planes assigned to fly only the long-haul flights, so that's a potential problem," she said.
