This article from NYTimes.com has been sent to you by psa188@juno.com. US Airways Is Reversing Some Changes Made Recently September 7, 2002 By JOE SHARKEY Reacting to a barrage of e-mail messages from business travelers, US Airways backpedaled yesterday on some aspects of its recently announced restrictions on nonrefundable advance-purchase fares. With the reversal announced yesterday, mileage earned on cheap nonrefundable tickets will continue to count toward qualification for the various tiers of elite-level frequent-flier status, US Airways said. Under the airline's change announced last week, mileage earned on those tickets would no longer have counted toward qualification for elite frequent-flier tiers that airlines use to award free upgrades to first- and business-class seats. But the main component of the change announced last week, and subsequently adopted by other major carriers except United Airlines, remains in effect. That is, effective Oct. 1, nonrefundable tickets that are not used lose their value unless an alternate flight is booked on or before the travel date. For nearly a decade, travelers who bought a nonrefundable fare but failed to actually take the flight were able to reuse that ticket, for up to a year, by paying a penalty fee. In recent years those fees have been $75 or $100. A US Airways spokesman, David Castelveter, said the airline, which is currently operating while in bankruptcy-court proceedings, dropped the tier-status restriction after receiving "thousands of e-mails from frequent fliers" protesting the move. None of the other airlines matched US Air's now-abandoned restrictions on so-called tier-mileage status. In another reversal yesterday, US Air said that effective Jan. 1 people holding nonrefundable tickets could try to fly standby on an alternate flight under certain conditions, including payment of a $100 fee; last week it had eliminated that standby option. Staggered by mounting losses - and startled further as it became clear last week that air-travel statistics for the peak flying month of August would show a continuing deterioration in revenue - the big airlines are desperately trying to raise fees and cut costs. They remain afraid to actually raise fares and possibly lose even more customers to rapidly growing low-fare competitors like Southwest Airlines and JetBlue Airways, analysts said. Business travelers, who account for the bulk of revenue at the major airlines, have been engaged in a revolt against high walk-up fares, the fully refundable fares with no restrictions that had usually been used for corporate travel. Starting about 18 months ago, large numbers of business travelers began using the more restrictive, and cheaper, nonrefundable fares that were intended for leisure travelers. The shift has flabbergasted airline executives, some of whom admit that they can no longer tell their leisure travelers from their business travelers. Among corporate travel executives, the current crackdown on nonrefundable tickets was widely regarded as a desperate and risky attempt by the big airlines to herd business travelers back into the higher-priced business-fare market by making the cheap tickets less flexible. "The airlines were already nickel-and-diming their best customers" by raising fees on things like extra bags and by cutting back on food and other amenities, said Michael Sommer, a New Jersey-based consultant on airline technology. "They're in desperate financial straits and trying to grab every possible penny. But I think with these moves on nonrefundable fares, they've now shot themselves in the foot." The airlines moved against nonrefundable fares "to slyly increase revenue while not having to raise ticket prices," said Kevin P. Mitchell, the chairman of the Business Travel Coalition. "They thought they could slip it through without anybody noticing it." The major airlines, on the other hand, insisted that with accumulated losses of about $10 billion since last September, there is a great need to quickly increase revenue. In addition, several airline executives said, on condition of anonymity, that the shift to nonrefundable fares among business fliers had been accompanied by an equally unanticipated increase in the use of so-called back-to-back bookings. Such bookings, which use multiple nonrefundable tickets to circumvent various restrictions built into the fare, like Saturday night stay requirements, "game the system" in a way that airlines are finding increasingly unacceptable, one executive said. John Kennedy, a spokesman for Delta Air Lines, pointed out that while the airlines are losing billions, average air fares are now the lowest they have been in 30 years, adjusted for inflation. Limiting nonrefundable fares and other measures merely constitute "an attempt by us to at least break even," he said. http://www.nytimes.com/2002/09/07/business/07AIR.html?ex=1032444962&ei=1&en=204347fbd846944e 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