NYTimes.com Article: MEMO PAD: In-Flight Phone Calls to Be Cheaper for Some

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MEMO PAD: In-Flight Phone Calls to Be Cheaper for Some

March 2, 2004
 By JOE SHARKEY





Using that airplane seatback phone suddenly became a lot
cheaper yesterday on about 2,000 commercial airliners
equipped with Verizon Airfone handsets. Verizon Airfone and
Verizon Wireless slashed the prices for using Airfones to
10 cents a minute from $3.99 a minute for Verizon wireless
customers who join a $10-a-month subscription plan for the
in-flight phones.

The $3.99-a-minute standard charge for Verizon Airfone is
in addition to a $3.99 basic charge for each call. Verizon
Airfone said the new plan was adopted to increase use of
the in-seat phones, which have not generated enough
revenue. Verizon Wireless who do not sign up for the
subscription plan will pay 69 cents a minute.

"Quite honestly, Airfone has not had the kind of usage we
think we ought to have," said William E. Pallone, the
president of Verizon Airfone, a subsidiary of Verizon
Communications. Verizon Wireless is a joint venture of
Verizon Communications and Vodafone.

Verizon Airfone has more than 100,000 handsets fixed to
seatbacks on United Airlines, Delta Air Lines, Continental
Airlines, US Airways and some regional carriers, Mr.
Pallone said.

"We will clearly make money" at the new rates for Verizon
Wireless customers, he said. "It's a volume game. Our
pricing has been set according to the value received in the
past.''

"We'd been able to keep the price up, but quite honestly
the proliferation of cellphones ate into our usage
considerably" in recent years, even though cellphones
cannot be used in flight.

Passengers with Verizon Wireless service will be able to
both make and receive calls in flight at the new rates; an
incoming call will be announced with a flashing light.

Mr. Pallone agreed that some passengers may not like losing
the airplane cabin as a refuge from chattering phone users.


"I think it's an issue," he conceded. "There is a certain
amount of courtesy you have to extend to your fellow
passengers. I think we'll find a nice medium."

Kent Craver, the manager of onboard product marketing for
Continental, said that market research showed that business
travelers were eager for the new service and that no
problems were anticipated.

"I don't think it will get to the point where people will
be annoyed," he said.

Alaska Airlines Revamps Fares

The barely standing Saturday-night-stay requirement that
was intended to prevent business travelers from buying
cheap leisure fares took another hit as Alaska Airlines,
the ninth-largest domestic carrier, announced a major fare
restructuring.

The new simplified structure both lowers fares and reduces
the number of fares in each market, from as many as 15 to
an average of 6. It eliminates requirements of staying for
a Friday or a Saturday night in favor of a one-night
minimum stay or none at all.

"The traveling public is fed up with convoluted
restrictions and we're doing something about it," said
Gregg Saretsky, executive vice president for planning.

America West Airlines Continues Expansion

America West
Airlines continues to expand its routes. The low-cost
carrier - which is based in Tempe, Ariz., and was the first
airline to shake up, reduce and simplify business fares two
years ago - began new nonstop service between its Las Vegas
hub and Austin, El Paso and San Antonio in Texas;
Cleveland; Edmonton, Alberta; and Vancouver, British
Columbia.

Last month, America West caused another stir in the
industry when it cut nonrefundable first-class fares to a
level as much as 70 percent below the industry average.

British Airways Offers

Fare-and-Hotel Deals

Got some
unfinished business in London? British Airways is running a
very low-cost air fare-hotel sale through March 29 from all
19 cities it serves in the United States. The sale runs
through next Monday.

The price from New York, $295 a person (with double
occupancy; taxes not included), covers round-trip coach
fare, three nights at the Royal National Hotel in Hotel and
daily breakfasts. From Los Angeles, the same package is
$465. That's for travel Sunday through Wednesday. Weekend
trips cost an additional $60.

For those wanting to go in more luxury, there's a package
with round-trip air fare in World Traveler Plus, British
Airways premium economy class, and three nights at the
Savoy Hotel at $1,499 a person from New York.

Fare Increase Ends in Failure

As oil prices soar and
threaten a financial recovery for airlines, major carriers
tried - and failed - to impose a $10 domestic fare increase
over the weekend.

The effort failed when Northwest Airlines, as it has in the
past, refused to go along, causing competitors to roll back
their fare increases yesterday.

Domestic fares remained lower in January than for the
period in 2000, according to the Air Transport Association.


http://www.nytimes.com/2004/03/02/business/02memo.html?ex=1079260187&ei=1&en=bf5ad0d7528f52b1


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