This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx /-------------------- advertisement -----------------------\ Explore more of Starbucks at Starbucks.com. http://www.starbucks.com/default.asp?ci=1015 \----------------------------------------------------------/ Policy Shift on Nonrefundable Tickets Lauded August 26, 2003 By JOE SHARKEY The decision last week by major domestic airlines to back away from strict policies on nonrefundable tickets was hailed yesterday by air fare experts as a significant victory for business travelers. "It's a huge retreat" by the carriers, said Kevin P. Mitchell of the Business Travel Coalition. The policies, which were imposed last year and greatly restricted the ability of passengers to reuse cheap nonrefundable tickets easily if they canceled their plans, were a "remarkable failure" that did not generate revenue, he said. In fact, Mr. Mitchell said, they drove business travelers to low-fare competitors. "Of all the new policies, restrictions and surcharges that the airlines layered in the last 24 months, this was the most onerous of all" for business travelers, he added. "It was a huge gamble by the carriers that this policy would be enough to force business travelers into buying higher-priced refundable tickets." Instead, he said, "the low-fare carriers just opened their arms up for all these fleeing business travelers." In the revisions made last year, passengers who changed flight plans needed to rebook nonrefundable tickets for a specific date within a year of the original departure date. Airlines made the changes to discourage business travelers - who tend to make more changes in flight plans than leisure travelers - from using cheaper nonrefundable tickets. Previously, a nonrefundable ticket could be used any time within a year of the original departure date, with the payment of a $100 rebooking fee. Terry Trippler, the air fare expert at the travel site Cheapseats.com, suggested that the retreat from the stricter policies, which was led by American Airlines and quickly matched by other major carriers, was "precipitated by American peering into September and realizing there is no travel rebound afoot, and that they have to stop bleeding market share to Southwest, JetBlue" and other low-fare carriers. Mr. Trippler and other airline industry experts said they expected all major carriers to make further revisions soon fully restoring policies on nonrefundable tickets to what they were before the revisions last year. Under the changes announced last week by most carriers, a passenger must still cancel a nonrefundable ticket before departure time to be able to rebook later (paying a $100 fee). But Northwest Airlines said last week that it would not require a cancellation notice before departure time - which in effect reinstated the policies on nonrefundables in place before the revisions last year. "Northwest is leading the way on this," Mr. Trippler said, adding that he expected others to follow. Airline finances brightened a bit in July, according to the Air Transport Association, the domestic carriers' trade group. Revenues were up more than 8 percent over July 2002, the group said. Average fares were up 2.6 percent, the first monthly rise this year. That does not translate into a better ride for passengers - and it does not mean air travel is up. Planes took off 82 percent full on average in July - the highest load factor since the trade group started keeping such records in 1970. But that is because there are fewer seats, as airlines put fewer, and smaller, planes in the air. Passenger traffic in July, traditionally the busiest travel month, was off 8.6 percent from July 2002. Trans-Pacific air fares, meanwhile, were off sharply - down 8.2 percent on average from a year ago. Hotels need to catch up with airlines in selling on the Internet, according to a new report from the Center for Hospitality Research at Cornell University. Last year, one in 12 hotel bookings were made online, but by 2005 one in 5 will be, say Bill Carroll and Judy Siguaw, who are professors at the School of Hotel Administration at Cornell. But hotel chain Web sites will control only about half of those bookings. The rest will be made by third-party online bookers like Expedia and Travelocity. http://www.nytimes.com/2003/08/26/business/26MEMO.html?ex=1062907173&ei=1&en=e74a7da29668e5c7 --------------------------------- Get Home Delivery of The New York Times Newspaper. Imagine reading The New York Times any time & anywhere you like! Leisurely catch up on events & expand your horizons. 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