Buchheit, director of travel and meeting services at Black & Decker Corporation in Towson, MD, is tired of paying ever-steeper airfares for business and meeting travel on monopoly routes. A founding member of Business Travel Contractors Corporation (BTCC)--the three-year-old consortium of businesses aiming to cut revolutionary deals with airlines for distance-based airfares--Black & Decker figures its per-mile costs between 81 cents and 84 cents on those routes dominated by a major carrier. Where there is competition, the cost falls to 31 cents per mile, said Buchheit, a panelist at BTCC's second Airline Competition Summit, held October 3 in Washington, DC. The summit stirred debate from frustrated travel and meeting executives like Buchheit over ways to reduce entry barriers for low-fare carriers. Co-sponsored by members of Congress, the meeting drew 269 participants representing Southwest Airlines, small carriers, airports, analysts, consultants, government, industry associations, hotels, lawyers, and the press. Of the 46 corporate executive attendees, most had responsibility for travel management. (Last April's summit attracted 225 participants.)
BTCC, of Lafayette Hill, PA, wants to stabilize the cost of tickets for business and meeting travel with net fares. In return for guaranteed business at unrestricted, mileage-based rates with a 15 percent discount below walk-on fares, the plan would require airlines to end travel agency commissions, overrides, and rebates. Travel agents would be paid service fees by corporations.
So far, BTCC has contracted only with Southwest Airlines. So the consortium is putting new energy into helping small, low-fare carriers open up monopoly markets as another way to lower business fares overall. As long as the major carriers are filling their seats in a robust economy, they show no interest in the net fare plan, said BTCC President Kevin P. Mitchell.
"We have not been successful in getting net fares off the ground, but we have done all we can in the current environment," said Black & Decker's Buchheit. In fact, the net fares plan was never mentioned at the summit; rather, BTCC gave participants three pro-competitive proposals to debate: * reallocate landing rights at four congested airports to new airlines or small incumbent airlines,
* authorize longer flights from Washington National Airport to outlying monopoly hubs,
* strengthen the Department of Transportation (DOT) role in determining predatory practices.
Meanwhile, business fares have climbed 34 percent since January 1 and the skies have become increasingly hostile to upstart carriers. Columbia, SC- based Air South airline went belly up in September and Western Pacific Airlines filed for bankruptcy only three days after the October summit.
At press time, however, five low-fare carriers had just won landing rights at New York's LaGuardia and Chi-cago's O'Hare airports, a development that is expected to bring down airfares on certain routes from those hubs.