Beating the Rise in Business Air Fares
You don't need the clout of a big company to get a bargain
You've got bloodshot eyes when you board your 6 a.m flight from Los Angeles, and when you touch down in the small airport in Ohio, you have to drive an extra hour in a rental car to reach your final destination in Pittsburgh. You'll also be sacrificing another weekend with your family because your business meeting is on Monday, and it's cheaper to book a Saturday night stay.
Sound familiar? Flying to alternative airports and weekend stay-overs are just some of the sacrifices made by small-business travelers trying to rein in the mounting cost of air travel, which has risen an average 9% a year over the past three years, according to American Express Travel Related Services. Even leisure fares, which reward long-range planning with a big discount, are ticking upwards.
"The small-business traveler is caught in the middle," says Terry L. Trippler, Minneapolis-based editor of Airfare-Report.com and Rulesoftheair.com, two Internet sites that specialize in travel discounts. "They don't have the clout to negotiate, and so they are the ones who are paying the full walkup fares."
But you're not helpless. With careful planning -- and some adroit bargaining -- small businesses can wring out even bigger discounts than corporate travelers can, ranging from 15% to 50%. You just have to know how to play the game.
Start by setting up a corporate travel policy no longer than a page. (American Express Travel Services says less than one-third of small businesses have one.) Ideally, this document should spell out the preferred carrier for discounts, the travel agency to book through, a definition of lowest fares, when to buy nonrefundable tickets, and under what circumstances to fly coach or business class. Also, select a travel manager to keep track of policy and to negotiate discounts.
Take Retail Construction Services, Inc. in Minneapolis, Minn., which has both a travel policy and a travel manager. The construction company has 13 project managers, half of whom are on the road each week. The company works regularly with a local travel agent who uses alternative-city flights and back-to-back ticketing, and it also encourages employees to turn in frequent-flyer miles for company use. "The most important thing is finding a travel agent who is an advocate for the company," says Joni Fletty, a vice-president for the company, who expects to see long-term savings of up to 40%.
Actually buying tickets is a job best left to a professional. It's harder than it sounds, says L. William Chiles, president and chief executive officer of Hickory Travel Systems in Saddle Brook, N.J., because any given domestic flight can have as many as 40 different seat prices. Part of the trick is playing a waiting game to see if cheaper fares will come along before you finally depart. One tactic: Find a travel agency that uses software to continually search for cheaper fares after you've made reservations until the time you actually pay for your tickets. Trippler says it's best if you find a good travel agent who won't squirm at the idea of creative ticketing. Some typical tactics:
Alternative-city flights: Flying into an airport near a major hub, instead of into the hub itself, can save as much as 60% or more. Trippler has assembled a book of the nation's 410 main airports along with 2,700 alternative airports, which he has distributed to a network of 110 travel agents (see table). The savings can be dramatic. For instance, if you flew from San Francisco to Pittsburgh in late August, you'd have paid a whopping $1,730. But if you flew instead to Youngstown, Ohio, your fare would have been just $430 -- a savings of 75%.
Depending on how much time you have, you can also get big discounts for taking a flight that has a connection in another city. Tom Parsons, editor of bestfares.com, another Internet discount-airfare site, says the average business fare from Dallas to Washington, D.C., during the week is currently $1,360. By taking a flight that stops in Atlanta first, the fare could drop to as low as $298. "We priced one flight from San Diego to Pittsburgh that went from $1,800 to $386" by flying into the airport in Youngstown, Ohio, says Retail Construction's Fletty. "A willingness to be flexible can save you a lot of money."
Back-to-back ticketing: This is a way to avoid a weekend stopover by buying two round-trip fares and throwing away the return portion of each ticket. Say you're traveling from New York to Chicago for a business meeting on Tuesday. The regular business fare -- leaving on Monday and returning Tuesday night -- could cost as much as $1,300. But airlines traditionally give huge discounts for a weekend stopover, and you can take advantage of this with a back-to-back ticket. First, buy yourself a round-trip ticket leaving for Chicago on Monday and returning the following Monday. Cost: about $200. Then call back -- preferably to another airline -- and buy yourself another round-trip ticket, this one leaving Chicago on Tuesday night and returning the following week. Cost: also about $200. Now, simply discard the return trip from each one and voila! -- you've saved $900. Or, if you're traveling to Chicago twice in the same month, you can use the returns on the different tickets.
This practice is frowned upon by the airlines, and while it's in a legal gray zone -- some carriers may cancel your tickets if they catch on -- it's not illegal, and some travelers do it anyway.
Behave more like a big business: This means scrutinizing travel costs and compiling careful records. With those in hand, a small business can approach a carrier and demand discounts in exchange for volume. "Travel is one of those areas that small companies tend to ignore," says Laurie Berger, editor of Consumer Reports Travel Newsletter. "The key is to pay attention and take a more formalized approach." Unfortunately, that may sometimes mean a lot of extra coffee at some out-of-the-way airport diners.
By Jeremy Quittner in New York
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