This article from NYTimes.com has been sent to you by psa188@juno.com. /-------------------- advertisement -----------------------\ Presenting the reloadable Starbucks Card. The Starbucks Card is reloadable from $5 - $500. Fill it up. Use it. Use it. Then, fill it up again. https://www.starbucks.com/shop/reload.asp?ci=672 \----------------------------------------------------------/ Animosity Over Different Fares for Different Travelers March 6, 2002 By JOE SHARKEY Don't as a rule write complaint letters," said Robert C. Julian, a very frequent business traveler who is the president of the Power Procurement Group, an energy-contract company based in Montana. But write one he did. Two weeks ago, Mr. Julian fired off a letter to Delta Air Lines (news/quote), cogently laying out fundamental grievances he says business travelers have about "discriminatory pricing" and about the way airlines treat them. Basically, he contended, Delta and its competitors have devolved into impersonal commodity suppliers who employ "ticket price roulette" to try to fill planes. "Most notable has been your insistence on clogging our air-travel infrastructure with cheap tickets for infrequent vacationers while attempting to recover your revenue shortfall by gouging business travelers," he wrote. Delta's executive vice president for marketing, Vicki B. Escarra, promptly replied with a similarly cogent letter responding to his points. But first we will hear from the complainant, who has flown more than 2.5 million miles on Delta since 1987, and belongs to the highest level of its frequent-flier program, the one reserved for those who log over 100,000 miles or take 100 flights annually. Though his beef is with Delta, Mr. Julian said in a telephone interview that it could be made with equal justification to any of the major airlines. The airlines, he said, "simply don't realize the animosity and the outrage of the commercial business traveler" over high fares and the "ridiculous" way the carriers set those fares. "You have designed your prices to reward those who pay the least (vacation travelers) and penalize those who pay the most (business travelers)," he wrote. "Even more troublesome is the fact that your prices and rules seem to change by the hour, and that you promote highly variable prices through obscure distribution channels (Internet, discounters, consolidators), practices guaranteed to enrage your best customers." Mr. Julian is certainly not alone in his complaint, which has been brewing for years among business travelers who can pay as much as seven times what a leisure traveler would for the same airplane seat. The disparities, and resentments, have only deepened in the last year as airlines have been sharply discounting leisure fares on selected routes in attempts to fill more seats as overall travel lags. "The airlines have got to start paying attention to people like this guy," said Kevin P. Mitchell, the chairman of the Business Travel Coalition, a trade group whose e-mail newsletter posted Mr. Julian's letter last week. "He represents the No. 1 important airline customer, and what this shows is that the airlines are moving these customers from being frustrated to being angered to being almost radicalized," Mr. Mitchell said. "This guy has had it." • A Delta spokeswoman said that the airline would not comment beyond Ms. Escarra's reply to Mr. Julian on Feb. 28. Ms. Escarra wrote that Delta designed fare structures to "balance supply and demand" for seats. "We always strive to determine what the market will bear for each seat and to set the price accordingly," she said, adding that available airline seats are "perishable products" that have "zero value" if they are still empty when the plane takes off. Leisure travelers are far less demanding on scheduling, she said. Business travelers "demand a high level of flexibility in scheduling and often wait until the last minute to book their tickets," she continued. Also, she added, many leisure travelers, "may be unwilling or unable to fly except at deeply discounted fares." Mr. Julian said that Ms. Escarra's response simply underscored his contention that airlines are subsidizing unreasonably cheap leisure travel while charging the highest possible prices to business travelers in attempts - notably unsuccessful lately - to fly profitably. "Their view of life is if they don't sell a seat they've lost revenue, and indeed they have," he said. "But if they sell that seat so cheap that they then have to make up the price difference with another sector of customer, the business traveler, then it is essentially an indirect subsidization of the vacation traveler." • The airlines' breathtakingly complicated yield-based pricing structures, in which most customers are unaware of how fares change literally by the hour until the plane door closes, "is antithetical to everything we do in a normal business environment," Mr. Julian said. "When we do commerce, you and I and everyone else in the business- place except the airlines, it's typically a sensible, logical transaction," he said. "You can understand what's going on. But the airline fares transactions? The average person on the street has no idea what's going on - while business travelers say to themselves, this seems to be upside down. The more I spend the more I get charged. And I can't control it? I can't hedge it? I'm at the mercy of this cartel?" Mr. Julian said that as a small- business executive, "I'm awfully sympathetic to the difficulties of running a complicated business." Airlines face huge public and governmental demands and small profit margins, even in the best of times. "Those guys really have a tough job," he acknowledged. But there the empathy ends. Mr. Julian has indeed had it, to the point that he is now flying a third fewer miles and looking for bargains. Air fares, he said, are the largest sustained expenditure he has ever made for any product or service. But lately, the airlines have made it clear that the business traveler is just a patsy, he said. "In commerce, brand loyalty is a cherished commodity," he said. "I used to look at Delta as an integral business partner, but not anymore. I'm no longer brand loyal at all." He added: "It's basic business, right?" http://www.nytimes.com/2002/03/06/business/06TRAV.html?ex=1016450910&ei=1&en=b234c81ecbc7682f HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company