Finally, the expensive seats are getting cheaper.
In recent days, the airline fare wars have moved to a whole new front. After cutting leisure-ticket prices to the bone, carriers have now introduced discounts of as much as 30 percent on full-fare coach seats aimed at business travelers.
Trying desperately to stimulate travel amid the worst slump in years, some are also offering cheaper upgrades to first class. And Delta Air Lines is rolling out business-class fares on overseas routes that are as much as $6,000 below the usual round-trip price. Even rides on the Concorde are on sale.
Despite the industry's troubles, most major airlines have been reluctant to make sizable cuts in the unrestricted tickets that business travelers favor, because those seats generate so much revenue. In fact, some carriers have been trying to push leisure fares higher, only to back down when their competitors didn't follow suit.
The fare war escalated almost overnight. American had recently been cutting deals with select travel agencies that included discounts for as much as 10 percent. Northwest Airlines struck back with two consecutive cuts on published, more broadly available fares. On Wednesday, American cut comparable fares by as much as 30 percent, in line with Northwest. But AMR Corp.'s American still has a special deal with travel agencies that can bring its discounts to as much as 40 percent.
Road warriors have long complained that prices were too high; in fact, many have recently been buying restricted leisure tickets even if it means paying a fee later on to change them. Now, the airlines have come to terms with the fact that their efforts to win back full-fare business travelers are lagging.
"The businessman is still not traveling, and the airlines have been trying everything" to get him back, said Bob Harrell of fare tracker Harrell Associates in New York. Airlines were loath to cut prices in places like first class and full-fare coach, "but now it looks like the airlines don't have a choice."
The airlines still haven't cut domestic first-class fares, though they are making it cheaper to upgrade. Last week, National Airlines lowered the cost of its first-class upgrades between Las Vegas and West Coast cities by as much as 40 percent. In June, Delta began letting passengers upgrade to first-class on select flights at the gate for as little as $40 — though the upgrade can be difficult to land.
Flights overseas, however, are a different story. There, the airlines have begun slashing business-class seats. This week, Delta launched a two-day sale including drastically reduced business-class fares for international hot spots such as Milan, Paris and London. A round-trip flight from Boston to Milan in business class is going for $1,688, compared with a normal fare of $5,428.
Tim O'Connor, a Denver resident who travels weekly, recently snagged a discounted business-class seat on Virgin Atlantic. O'Connor, who is president and chief executive of the United States Potato Board, paid $7,500 to fly himself and an employee to London — nearly half what he paid on his last flight there. He received a massage during the flight and was served steak and an omelet.
Airlines would rather sell their high-priced seats at the front of the plane — even if it means big discounts — than give them away as frequent-flier upgrades or fill them coach passengers who get displaced on oversold flights. "It's always better to sell the seats than put an economy passenger in there," Harrell said.
Analysts also point out that all this tinkering to fare structures has relatively little downside for the airlines, partly because so few travelers have been paying the pricey full fares.