Not surprisingly Southwest, which has had an active Web site for over two years, has been the most aggressive of the three US carriers. Since late June, it has regularly offered special Internet fares 60 per cent below standard walk-up tariffs, on batches of routes out of a particular city. Sold online for a period of three or four days, these fares are nonrefundable, and require 21-day advance purchase online, a one-night stay and roundtrip travel. Unlike other carriers' Wednesday Internet discount fares - which Southwest doesn't offer and must generally be used the following weekend - Southwest's special fares can used for travel as far as three months into the future.
According to Kevin Krone, Southwest's director of marketing automation, the carrier has promoted cities which not only offer 'good (air) service' but also are 'predisposed to electronic purchasing.' So far these have included Salt Lake City, Seattle, Phoenix, Austin, Houston, Nashville, Chicago, Kansas City and St Louis.
'We do (the initiatives) to stimulate trial of the site, to get people excited. It has nothing to do with weakness in the market,' explains Krone, adding that the response has been 'very positive'. Other airlines have often matched Southwest, either offline or through their own Web sites.
One issue that does concern Krone is how to alert travellers of the special fares' existence in a timely fashion. At present, they are publicised through press releases sent to the media. 'We have to think of a better way to get the word out, but we haven't figured one out short of advertising,' Krone says. 'Online advertising is fairly expensive and, to a great degree, ineffectual.'
Delta and America West have also have created unique, though far more limited, fare initiatives for their Web sites. Since early October Delta has had two promotions: one features discounts up to 50 per cent lower than standard offline advance purchase fares for travel on routes linking the carrier's Salt Lake City hub with nonstop US destinations; the other offers similar discounts on routes to or from seven cities in the eastern US. Delta also requires online purchases 14 or 21 days in advance, while travel can occur up to four months later.
In addition to its regular Wednesday Internet discounts, America West launched one major on-line promotion in mid- November. This offered fares for domestic night flights for as much as 20 per cent less than offline fares. Online, 21-day advance purchase and an overnight Saturday stay were required, and travel was permitted as much as three months later.
Ken Boyle, Delta's manager of electronic commerce, says the carrier's initiatives are designed to 'stimulate revenues'. He also says Delta is looking at 'push-pull technology' to distribute information online to travellers who register at its Web site.
Kevin Short, America West's vice president of revenue management and product distribution, explains that his carrier aims to 'give screaming deals to people who are willing to travel at a time not always the first choice among customers.' Only offering these fares online cuts out reservations agents, lowering America West's costs so it can offer deep discounts, says Short. Since the fares are only listed on the airline's Web site and not in any CRSsystem, they are not filed with the Airline Tariff Publishing Company, so competitors take longer to respond, he adds.
Cathay Pacific had three special online fare offers in 1997 via its three-year-old 'CyberTraveler' Internet programme. The first featured consolidator-type, economy class fares to Hong Kong; the second steeply discounted first and business class fares to Hong Kong for four days during the handover period; and the third a $999 travel pass for roundtrip transport to Hong Kong from the US and one month of unlimited travel on the carrier's intra-Asia system, all in economy. All the fares were promoted online and bookable by travel agents, whom Cathay is anxious not to alienate, since they generate over 95 per cent of its business. A spokesman says the promotions were designed to offer value to Cathay's 200,000 CyberTravelers - people who register on its US Web site - as well as stimulating business to Hong Kong post-handover and promoting Cathay's intra-Asian service. Cathay expects to offer another Asian travel pass in 1998, with price determined by the number of days of travel, as well as special online fares to promote Cathay's new double-daily Los Angeles-Hong Kong service.
Other possible fare initiatives are on offer to US airlines by vendors like Rosenbluth International, a Philadelphia-based travel management company; Arinc, an Annapolis-based airline-owned company that provides telecommunications services; and Price Line, a new, Stamford, Connecticut-based privately held operator.
Although none of these companies will discuss specifics, Rosenbluth is reportedly developing a centralised, online clearing house for carriers' distressed inventory, to be marketed under its name, while Arinc is developing another system for unsold seats.
Price Line is said to be creating its own online system under which leisure travellers would bid to travel on a specific day at a specific price. Participating airlines could choose to accept the bid, at which point the traveller would automatically be ticketed. Passengers would be charged $3 for each bid but airlines would pay nothing.
Arinc and Price Line are expected to announce details of their initiatives in January, but Rosenbluth has yet to decide whether to proceed.
Jane Levere
Source: Airline Business
