American tests simpler fare structure in some cities

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American tests simpler fare structure in some cities

NEW YORK (AP) =97 The world's largest airline has taken a tiny step toward=
=20
placating corporate travelers fed up with the huge disparity between=20
business fares and leisure fares. American Airlines launched a simplified=20
fare structure in a small number of markets last week, lowering the price=20
of tickets bought at the last minute by as much as 40%. The apparent goal=20
is to steer business travelers away from rock-bottom, advance-purchase=20
fares that have become popular during the economic downturn. It's all part=
=20
of an effort to compress the wide range of airfares, which many corporate=20
travel managers say is at the root of business-travelers' frugality this=20
past year. In many cases the cheapest business fare is five times more=20
expensive than the least expensive leisure fare. In response, many business=
=20
travelers now purchase tickets far in advance and they search the Internet=
=20
for the best deals around =97 strategies typically associated with leisure=
=20
travelers.

Under the changes made by American, the lowest one-way walk-up fare between=
=20
Dallas and Los Angeles is now $647, down from $1,078. Between New Orleans=20
and Seattle, the lowest one-way walk-up fare is now $604, down from $907.
In contrast to the cheapest fares aimed at leisure travelers, which have=20
tight restrictions, walk-up fares are fully refundable and travelers can=20
make schedule changes or fly stand-by at no extra cost. "They're going to=20
be surprised by how many business travelers are going to take them up on=20
it," said Terry Trippler, a Minneapolis-based travel consultant. Leisure=20
travelers aren't so lucky, though. They will face tighter restrictions on=20
the least expensive fares, including requirements to purchase such tickets=
=20
30-days in advance instead of 14-days in advance. To be sure, the fare=20
structure being tested by American is extremely limited. It will affect=20
passengers on just 23 routes, less than 1% of the carrier's total schedule,=
=20
which has some 12,500 domestic city pairs.

However, analysts say it could mark the beginning of something larger if=20
American succeeds in attracting more higher-paying business customers. "We=
=20
hope it works and is replicated by the other network carriers," said David=
=20
Stempler, president of the Air Travelers Association in Washington. The new=
=20
fare structure was first reported Friday by the industry publication Travel=
=20
Weekly. American and United Airlines depend heavily on corporate spending=20
and have been especially hurt by business travelers' increasing efforts to=
=20
avoid the higher fares. In September American's chief executive, Don Carty,=
=20
said: "The problem for us is that only about one in a dozen passengers is=20
flying at full coach fares." That's significant, he added, because nearly=20
half of American's sales come from traditionally higher-paying business=20
travelers.


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