Airlines to Business Fliers: Pay More

By SCOTT MCCARTNEY

By Scott McCartney

The Wall Street Journal

Get ready for a wave of airline rules requiring you to stay at your destination a minimum number of days or over a Saturday night if you want the cheapest tickets.

The move is an effort to force business travelers, who usually need the most flexibility and want to be home on weekends, to pay more.

Airlines have increased restrictions on cheap fares by raising overnight requirements, bumping up what had commonly been only a one- night-stay requirement to two or three nights. The overnights can be weeknights, so those tickets aren’t as onerous as Saturday-night- stay tickets. But the three-night requirement does limit the utility of discounted fares for road warriors.

A recent check by FareCom pare.com found that 64 percent of the 5,335 round-trip fares for sale at United, for example, had some sort of minimum-stay requirement. Most were two- or three-night- stay requirements.

Fare consulting firm Harrell Associates compared restrictions on round-trip tickets on 280 routes at six big airlines and found that the number of weekend-stay requirements was actually down 10 percent compared to a January sample, while the number of three-night-stay requirements was up 87 percent.

“That’s a new phenomenon,” said Bob Harrell, president of the firm. “It’s not the dreaded Saturday-night stay – it’s three nights. The three-night thing is sort of a back-door way to try to block business travelers.”

Airlines tried to bring back Saturday-night-stay requirements earlier this year but were thwarted. United added the requirement to its cheapest tickets, and some competitors matched.

But the change didn’t stick, mostly because discounters compete on so many routes these days, and United and others have had to remove the restriction this summer from most fares.

Now, airline executives say, they will try again, and again.

For many years the Saturday-night requirement was a tactic airlines used to separate business travelers from leisure customers. The Saturday-night stay forced many business travelers to either pay hundreds of dollars more for each ticket, or to spend an extra night or two on the road to save money. If the choice was a $300 ticket or a $2,000 ticket, many companies would ask travelers to stay over Saturday night at a nice hotel, have a nice meal and still save hundreds.

But as discount airlines spread into more markets, bringing simpler pricing that often didn’t have such burdensome restrictions, incumbent carriers lost customers and were forced to simplify their pricing to stay competitive.

High fuel prices spelled the end of simplified pricing, and now airline executives have business travelers in their cross-hairs. Because they may not be as price-sensitive as vacationers or people flying to visit friends or relatives, airlines are scrambling for ways to get business travelers to spend more.

As airlines ground planes this fall and tighten the supply of seats, they may revert to wider imposition of Saturday-night-stay requirements.

Chief Executive Richard Anderson said Delta is “working on doing that. Our belief is that is the structural way in the market to differentiate” between types of customers. Doing that allows Delta to offer lower fares to price-sensitive customers, by charging higher prices to those with bigger wallets.

John Tague, chief operating officer at United, agrees.

“I think the pricing structure needs to be segmented,” he said. Fares have to still go up to cover fuel costs, and one way to do that is to get business travelers to buy more-expensive tickets without raising prices on discounted tickets so high that leisure travelers stop buying.

“The industry is in no position to view fuel pressure as temporary,” Tague said.

Originally published by BY SCOTT MCCARTNEY.

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