ProAir: The Little Airline That Could With the cost of business fares reaching new heights, some companies are taking innovative steps to bring ticket prices back down to earth. An innovative way to control travel spending began nearly a year ago in Detroit, when the General Motors and DaimlerChrysler corporations named the startup company ProAir their preferred carrier to four cities in exchange for guaranteed prices. In the second half of 1998 alone, the deal saved DaimlerChrysler $2 million.
GM and DaimlerChrysler employees traveling on business to Baltimore, Indianapolis, Newark, or Philadelphia fly on ProAir out of the Detroit City Airport for a flat monthly fee that is guaranteed for the next four years. The auto companies' suppliers also can take advantage of the arrangement, and employees' families can fly to any of ProAir's 10 destinations on a stand-by basis for $25 per flight segment.
Charles Braswell, director of general services for DaimlerChrysler, says from June to December, 300 to 500 employees a month traveled on Pro Air instead of on major airlines, saving the company $2 million. "We think that's excellent," he says. Braswell believes other corporations and airlines will follow their lead. "I don't think this will be the only deal that will be struck," he says.
Kevin Mitchell, chairman of the Business Travel Coalition in Lafayette Hill, Pa., which lobbies on behalf of companies and travelers seeking lower airfares, says many corporations have discount agreements with airlines, but there are no price guarantees and the pricing structure hasn't been simplified. "What's extraordinary about ProAir is corporations intervening on the supply side of the market," Mitchell says. "It's a quantum leap forward."
Other atypical examples of corporate involvement in the supply side of the airline industry are cropping up across the country. In Des Moines, numerous Midwest companies, including Principal Financial Group, Amerus Life Insurance Co., and Farm Bureau Mutual Insurance, teamed up to invest in fledgling carrier AccessAir in an attempt to lower fares and spur economic development.