USAirways Limits Deals: Airline Reduces Contracts,

[700UW]

USAir Limits Deals: Airline Reduces Contracts, But Denies Foregoing All Corporate Negotiations

By Jay Boehmer

MAY 15, 2006 -- Positioning itself as a low-cost carrier since last year's merger with America West Airlines, US Airways is significantly reducing the number of contracts offered to corporations and has made deep cuts to its salesforce. While several US Airways clients from large companies said the move represents a degree of abandonment of the carrier's corporate base, the airline said that as an LCC it is offering fares that are historically low—with or without a contract.

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[Art at ISP]

I would have to agree with the corporate clients--both they and to a degree the most frequent fliers are not held in any great esteem by this new management team.

The only thing which resembles an LCC about this new airline is the product itself. To claim that fares are at a historic low is nonsense. Fares on the east side are higher than most of the competition, especially legacies.

I understand the need to cut costs (fewer sales reps) and raise revenues (no more contracts), but they can't think for a minute we're buying the nonsense about low fares. When the rationalization which happened at HP happens system wide, I will reconsider, but not now.

Again, we don't need the cheapo leisure fares, but we do want REASONABLE business fares--and $800 LGA-CLT is beyond reasonable.

We understand and respect the fact that there will be adjustments to fares and service, but as of now all they are doing is taking from the service side, and giving NOTHING back to the corporate/frequent customer. It does APPEAR more and more that they value the casual occasional flier more than they do us..... and remember perception is reality to most.

 

[SS255]

I can't believe I'm about to disagree with Art, but there is actually a residual benefit to offering corporate contracts, and that is the proprietary business of the corporations with whom the airline engages in "exclusive" contracts. Case in point: My company used to have corporate contracts with UA and AA. From what I've been told, after 9/11 UA stopped "working with them." I interpreted this to mean that UA wouldn't waive change fees, etc., and not that AA offered a better corporate discount. As a result, my company ended up giving AA our exclusive business for routes on which UA and AA compete. One of those routes is the very lucrative LAX-JFK route, where we probably average one or two paid business class AND paid F tickets per flight, and Y/B fares are de rigeur for employee travel. (No joke. I'll be with one of the paid J flyers tomorrow AM, only I'll be in the back of the bus. :angry: ) And our travel department is VERY strict about employees flying AA on this route. (I found that out the hard way.) So if US were smart, instead of offering discounts on corporate contracts, they might want to think about offering booking terms which are more flexible than what the average Joe pays for the same fare class, in exchange for route exclusivity.

 

[Charlie_Tuna]

I would have to agree with the corporate clients--

Well of course!! Its in your best interest to fly for free

 

[Art at ISP]

Charlie Tuna,

I don't fly for free. My company spends hundreds of thousands each year on air travel, and I pay my own way more than a few times a year.

And SS, I didn't disagree with you--you make a very valid point. My company has contracts with DL and UA, and they remain preferred carriers, but the discounts don't apply to most of the lower restricted fares any more. THAT's the part I do understand. Your point about locking in the business is well taken.