The big airlines have also been losing share to low-fare competitors like Southwest Airlines and JetBlue Airways. At the other end, chartering private business jets has become more attractive to many companies.
Della Maricich, who runs a Seattle company that designs and produces trade show exhibits and graphics, has found her own creative solution. Whenever someone in her organization has to fly on short notice and faces a US$2,000 fare, she uses frequent-flier miles. "We have a bank of miles available," she said.
To others, the answer to sky-high walk-up fares is to drive, or simply stay home and rely on alternatives like videoconferencing. "As justified for the expense as you used to have to be, you now need to be hyperjustified," said Kaye, the software company manager.
The smaller choice of flights and longer waits at airports since Sept. 11 have even pushed some business executives out of the market who would otherwise be willing to pay more for convenience. Kaye has stopped flying to several Western cities because it takes too much time. "It's not just the high fare but the lost productivity," he said.
Some airlines have made limited pricing concessions to business customers, but critics say those moves have actually added to the complexity of the fare structure and have failed to get to the heart of the problem: the stratospheric rates charged to last-minute travelers.
Two years ago, for example, Northwest Airlines executives realized that many business fliers were willing to stay over a Saturday night rather than pay higher restricted fares. It then lowered its business fares by 40 percent to 50 percent, a savings roughly equivalent to the cost of spending the extra time on the road. Even so, the tickets have to be ordered 10 to 14 days in advance. Other carriers, including United, AMR's American Airlines and Delta have introduced alternate business fares of their own.
Earlier this year, Rosenbluth International, a big travel-management company, proposed a more ambitious solution to airlines: cut business fares 30 percent across the board and reduce corporate discounts by the same amount.
But airline executives countered that such simple formulas would cost them sales. "We just haven't been able to make the economics work," said Bach of Northwest.
In any case, a new fare structure would be vulnerable to competitive cost-cutting. Carriers have learned that they must match a rival's fare or risk losing market share.
Last week, America West Airlines lowered its walk-up fares and relaxed restrictions, but because it carries just 3 percent of domestic passengers and attracts relatively few business travelers, analysts doubted that the initiative would do much to shake up the industry.
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