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 \----------------------------------------------------------/ Joint Efforts to Attract Airlines in Several Cities March 12, 2002 By MICHELINE MAYNARD DETROIT, March 11 - Large corporations, frustrated by the cost of travel from airports dominated by a single carrier, are teaming up in several cities to investigate ways to spur competition and negotiate lower fares. The proposals include luring new carriers by guaranteeing corporate bookings; negotiating collectively with the airlines instead of individually to secure lower fares; and setting up air shuttles to frequently visited cities for corporate employees. The efforts are most advanced in Detroit, where representatives of 27 corporations, including DaimlerChrysler (news/quote), Delphi Automotive Systems (news/quote) and Kmart (news/quote), met last month to consider alternatives intended to loosen Northwest Airlines (news/quote)' grip on the market. Participants at the meeting also included officials from companies based in Minneapolis, where Northwest is based, and Cincinnati, a hub for Delta Air Lines (news/quote). Combined, the travel executives and purchasing managers in attendance handle $2.5 billion a year in corporate travel. "We think more competition in Detroit would benefit Delphi and the other corporations here," said Claudia Piccini, a communications manager at Delphi. While the group reached no consensus, the meeting "represents a sea change in the level of frustration and concern by corporations" over the state of air travel, said Kevin C. Mitchell, chairman of the Business Travel Coalition, which represents corporate and business travelers. Mr. Mitchell's group was the host of the meeting, held Feb. 20 in suburban Detroit. "When the economy started to slow down, companies just took a step back and said, `enough is enough,' " Mr. Mitchell added. Detroit is a hub for Northwest, which has more than 70 percent of flights here. A Department of Transportation report last year estimated that Detroit passengers paid 51 percent more for short flights and 21 percent more for international flights compared with passengers in cities where there is more competition and 21 percent more for international flights compared with passengers in cities where there is more competition. Regardless, Northwest takes issue with the impression that it dominates the market. Kurt Ebenhoch, an airline spokesman, contended Detroit is a "highly competitive city." About 40 percent of flights from the airport are connections by travelers who are passing through, not flights originating here. And several major carriers have operations in Detroit, including American, Delta, Southwest and Continental, though they have just a handful of flights each day compared with hundreds for Northwest. The companies' search for alternatives appears to have been prompted by Northwest's decision last December to eliminate corporate discounts on its lowest published fares. Northwest and other airlines routinely gave their biggest customers discounts of 10 percent or more off those tickets, which are meant primarily to lure leisure travelers. At the same time, Northwest cut leisure fares by 25 percent and said it would offer corporate discounts on its BizFlex fares, coach class tickets aimed at business travelers, that cost half the full coach fare and do not require a Saturday night stay. Mr. Ebenhoch said those actions resulted in lower ticket prices to many destinations than the companies would receive through the corporate discounts. "We're not going to offer corporate discounts on already deeply discounted air fares. That does not allow us to provide the type of high- frequency, full-service product that allows us to be economically viable," Mr. Ebenhoch said. Continental, which has a marketing agreement with Northwest, has taken similar actions with shared clients. But other carriers have not followed Northwest's action, a point not missed by the corporations. "They are the only carrier to do it," said Jack Ferry, a Kmart spokesman. United Airlines does not offer across-the-board discounts with corporations but negotiates individual agreements with each company, said Joe Hopkins, an airline spokesman. Officials at other airlines had no comment. Participants at the meeting said they were not yet ready to endorse an approach. "We are watching the outcome and keeping our options open," said Ms. Piccini, the Delphi spokeswoman. David Barnas, a spokesman for DaimlerChrysler, added, "Competition is always beneficial to the customer, especially if it leads to better service and lower costs." Detroit has a history of aviation activism. In 1998, General Motors (news/quote) and Chrysler signed five-year contracts with Pro Air, a start-up airline that operated from Detroit's secondary airport, City Airport. The airline, which started with three 737 jets, served a handful of cities, including New York, and hoped to expand to two dozen planes by 2003. Instead, the Federal Aviation Administration grounded Pro Air in 2000 because of maintenance problems, and it filed for Chapter 11 bankruptcy protection. It has not returned to service. A more successful example of a carrier with corporate partnerships is AirTran (news/quote). It has developed arrangements with companies and municipalities that have resulted in new service to Biloxi, Miss.; Pensacola, Fla.; and Grand Bahama Island in the Bahamas. On Thursday, AirTran will begin service to Rochester under a deal negotiated with state and local officials. Kevin P. Healy, vice president for planning with AirTran, said his airline talks to 100 different communities a year about starting service. While he says he thinks Detroit has potential for additional carriers, "Northwest is a formidable competitor," Mr. Healy said. http://www.nytimes.com/2002/03/12/business/12AIR.html?ex=1016958641&ei=1&en=c20772c5c88e69b9 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. 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