Airlines dangle 'buy 3, get 1 free' bait

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Airlines dangle 'buy 3, get 1 free' bait

The promotions are aimed at high-fare customers. Tickets bought on most=20
cheap fares requiring Saturday night stays =97 the kind many vacationers buy=
=20
=97 don't count. People who take three qualifying trips in three months earn=
=20
a free ticket.
United Airlines was first to launch the promotion, coinciding with a new=20
advertising campaign aimed at business travelers. But all airlines are=20
grappling with intense price competition and a three-year slump in business=
=20
travel that has led to deep losses for most. "There's definitely a lot to=20
be gained by enticing the business traveler to come back," says airfare=20
analyst Steve Hendrickson of Sabre Airline Solutions. A passenger on an=20
unrestricted coach fare can be worth six times the revenue of a passenger=20
on a Saturday night stay fare, he says. "The big motivation for airlines is=
=20
to just get a few of them," Hendrickson says. Industry data show why=20
airlines miss big spenders. Hendrickson's analysis found people flying from=
=20
the East Coast to the West Coast produced $326 million less revenue last=20
summer than in summer 2000. He divided the passengers into two groups:=20
"premium" passengers, who paid more than $350 one way, and those who paid=20
less. The premium group's share of all passengers fell to 10% in 2002 from=
=20
18% in 2000, and it accounted for $314 million of the revenue drop, he says.

United's move was initially viewed by the other carriers as "an act of=20
desperation," says Michael Koetting, senior vice president of the corporate=
=20
travel firm TQ3 Travel Solutions. But they matched United. The airlines are=
=20
hoping that a free ticket will persuade some travelers to fly more with=20
them or squeeze in trips they might not have taken. Some travelers also=20
might be induced to overspend. TQ3's spot check of round-trip fares for a=20
weekday trip next month found: Atlanta-Los Angeles. Delta's lowest=20
qualifying fare is $511, although a $250 fare is available with seven-day=20
advance purchase. The difference is $261. Minneapolis-Phoenix. Northwest's=
=20
lowest qualifying fare is $342, but there's also a 14-day advance purchase=
=20
fare for $27 less. Houston management consultant John Hedgcock says he'll=20
commit to Continental instead of taking occasional flights on American.=20
"I'll be more likely to take a slightly worse schedule or slightly worse=20
fare because of the option of being able to get a free ticket," he says.

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