After last year's dramatic increase in airfares, meeting executives may be looking at the new year with less than great expectations. Yet many airline analysts expect fares to stabilize or decrease in 1997. "I think airfares overall reached a peak around Labor Day of 1996," says Terry Trippler, editor of the Minneapolis-based Airfare Report. "In 1997, barring any fuel-cost catastrophe, we will see fares not only level off, but moderate. There should be a reduction in overall fares."
The Air Transport Association's chief economist, David Swierenga, agrees. "I expect fares to come down overall, although we are still faced with reimposition of the ten percent federal ticket tax, and that's one factor that may muddy the waters," he says. The tax, which lapsed on December 31, 1996, is on a fast track for reinstatement, having been approved by the Senate Finance Committee in January.
According to Trippler, the news is potentially as good for meeting business as it is for business travelers. "I expect that group fares will stabilize or go down in 1997," he says. More carriers now offer a zone-fare option for groups-flat fares based on travel between specified zones, or areas of the country, he added.
American Airlines, for one, recently revised its zone-fare pricing for group travel, making it less expensive and more flexible. The new fares range from $235 to $556, translating into an average price reduction of 20 percent. (Hawaii costs more.) Saturday-night stays are no longer required, the maximum stay has increased from 14 to 30 days, and there are no penalties for block cancellations 120 days or more prior to travel. The zone fares apply to destinations within the 48 states, Hawaii, and Canada that are served by American Airlines and American Eagle.
Zone fares take on added importance given the uncertainty over airfares, according to Maureen Pickell, Northwest Airlines' manager of meeting and incentive sales, Eastern region. Pickell declined comment on the outlook for 1997 airfares. But, she says, "Zone fares are not that vulnerable to changes in general. They are one way meeting planners can protect themselves." Northwest has zone fares, good for up to two years, for more than 70 cities in the U.S. and Canada.
Chrysler Corporation's manager of corporate services, Charles Braswell, sees things differently, predicting that group airfares "will edge up" even higher in 1997. Zone fares can help, he adds, "but airlines are market-driven. Going back about two years, the airlines' load factors were low, but they have since improved. There's no advantage for them to sell seats at a lower price to groups."