From today's NY TIMES:
Winging It, With Internet Fares
By EDWIN MCDOWELL
EATTLE -- Atop the observation deck of the 605-foot-high Space Needle, Douglas Brown pointed out Mount Rainier, the towering snow-capped peak in the distance, to his wide-eyed wife. Next he explained where the distinctive white ferryboats were probably heading as they chugged across Puget Sound.
Afterward, he remarked that in this coffee-loving city, it was not unusual to find espresso machines in gas stations.
But this was not your usual travelogue, and these were not your everyday tourists. Douglas and Gladys Brown, who live in Queens, were eager volunteers in the small but growing army of long-weekend warriors -- travelers who journey the country, and often the world, on fares available only on the Internet.
And not just any Internet fares, but the rock-bottom, last-minute ones known as E-fares, generally offered at midweek for the following weekend's travel.
Among the E-fares offered in recent weeks have been round trips between Chicago and Philadelphia for $129, Houston and Boston for $229, and Newark and Rio de Janeiro for $399 -- each roughly half the lowest coach fare. But that is only a sprinkling of the hundreds of heavily discounted E-fare flights available each week from the major airlines.
The Browns are among the tens of thousands of travelers who use E-fares to good advantage. Eager for his wife, who was born in Argentina, to see her newly adopted country, Brown has traveled with her in recent months to San Francisco, Los Angeles, Houston, San Antonio, Orlando, Fla., and Chicago. Before long, the couple hope to use E-fares to visit Argentina, where Mrs. Brown will assume the role of tour guide.
In the meantime, their 4,800-mile round trip between New York and Seattle, where Brown lived for six months in 1995, cost them a bargain-basement $239 each -- roughly 5 cents a mile. That compares with an industry average of 13.1 cents a mile for trips in 1997, the latest year for which figures are available.
"E-fares are almost always the cheapest fares available on the Internet, averaging 5 to 15 percent lower than 14-day advance fares," said Michael Stellwag, a former pricing analyst with Southwest Airlines and now an analyst at Warburg Dillon Read in New York. "The 14-day tickets let you stay away longer, but the disadvantage is that you can't just pick up and go."
These fares are not for creatures of habit or those who prefer a relaxing weekend at home to a whirlwind visit to another city. They are also not for workaholics or people who have trouble making up their minds: When an airline sends out a mass e-mailing announcing a flight and fare that suits you, you've got to jump -- or risk losing out. Hamlet would probably be left behind.
So who is darting to E-fares? It is risky to generalize, but many buyers fall into three rough categories: separated lovers, people who make repeat visits to relatives or friends, and people hungry for adventure. What they have in common are flexible work schedules, spontaneity and, usually, no small children.
Moreover, "leisure travelers shop for price, and tend to be males between 18 and 30," said Jason N. Ader, a managing director at Bear Stearns, who a few months ago produced a report on Internet bookings by leisure travelers. "And about 90 percent of all leisure travelers who make bookings use the Internet for other things."
E-fare travel is growing rapidly, the airlines say, though they divulge no numbers. Millions of people sign up with one or more airlines to receive free e-mails that list the fare offers for the weekend. To stand the best chance of getting a ticket, they must respond quickly -- usually within a day, though less popular routes may still be available on Fridays.
They can book by e-mail or, for an extra $20 a ticket, by phone. For domestic travel, many E-fares require a Saturday departure and a Monday or Tuesday return, though there are variations.
American Airlines, which originated the weekend getaways in 1996 to fill seats that would otherwise have stayed empty, now has 2.1 million subscribers. And with Delta joining in a month ago, all the major United States airlines now take part.
While airlines decline to say how much they derive from E-fares, American said its monthly revenues "are into seven figures." That means at least $12 million a year, and while that is minuscule compared with American's estimated 1998 passenger revenue of $16 billion to $17 billion, it can pay for a lot of in-flight snacks, overtime or jet fuel.
In addition, airlines derive revenue from the discount rates they arrange for E-fare passengers with certain hotels and rental car companies.
E-fares also nurture familiarity that could translate into patronage when the e-mail customers buy higher-priced tickets.
These fares were spawned, basically, by computer analysis. The airlines are getting better all the time at using computers to analyze past trends and future bookings, and then to predict, often far in advance, roughly how many empty seats there will be on a given flight.
The information also enables them to determine how many seats they can fill at Fare A, Fare B and so on. That explains the wide range of fares for the same flights, with passengers often paying two or three times as much as their seatmates, or even more.
On the Browns' nonstop flight to Seattle -- Continental Airlines Flight 121 -- fares ranged from their $239 to $307 for a 14-day advance purchase to $1,828 for a same-day coach ticket. (One oddity of the complex new world of air travel is that last-minute travelers can pay both the highest and lowest fares.)
Airlines try to calculate all the angles. While few Saturday flights carry business travelers, whose higher fares pay most bills at most airlines, leisure travelers abound on Saturday mornings, said Stellwag of Warburg Dillon Read. But because there are still some Saturday morning seats to fill, airlines allow E-fare passengers to depart on Saturday morning and also return on Monday, another busy travel time, as well as on Tuesday.
If the airlines insisted on E-fare travel only at off-peak times, the getaways would either be too compressed or would cut further into the workweek, and "not enough people would buy E-fares to make them worthwhile," Stellwag said.
Those who do find them worthwhile include Stellwag himself, who, with his background in airlines, love of travel and reasonably flexible hours, is adept at working the E-fare system to his advantage.
Recently, he flew from Newark to Indianapolis on Continental, then rented a car and drove 90 minutes to central Illinois to see his grandmother. While he was there, he helped her buy a car (a Buick Park Avenue), and she looked over his tax return, using the skills from her years in a tax business with her husband. "I have an M.B.A. in finance," Stellwag explained, "but I still need help with my taxes."
The week before his Indianapolis trip, Stellwag resorted to another bit of E-fare creativity. Unable to find an inexpensive flight to New Orleans, where he gets together each year during Mardi Gras with seven buddies from Southwest Airlines, he found a Continental E-fare to Birmingham, Ala., for $129 and then flew to New Orleans on Southwest. His deft two-step saved more than $500 off the regular Newark-New Orleans round-trip fare.
Dick Ford, a manager for Global Crossing, a telecommunications company in Morristown, N.J., used similar ingenuity two years ago, while he was working for AT&T in Chicago. He was given two tickets to a Chicago Bulls-New York Knicks game that he knew his brother in New Jersey would love to see.
There were no E-fare tickets from Newark to Chicago that weekend, but there were some from Newark to Toronto and from Toronto to Chicago. "So I routed my brother through Toronto," Ford said. Not only did they get to see Michael Jordan, he added, but "the Knicks won the game by a bucket."
Sheldon Smith of Arlington, Va., and his wife, Sue Wadel, are typical of those who thrive on spontaneity. Last fall, they traveled to Madrid on impulse, spending time in the Prado, and last month, on a lark, they spent four days in Frankfurt. They have the flexibility to travel at the last minute, said Smith, who does radio and television voice-overs, and the E-fares make it all possible.
Todd J. St. John, a finance manager for United Parcel Service in Mahwah, N.J., often flies on impulse to Louisville, where he has friends, and returns on the first flight Monday morning to be in the office by 10. Other times he takes a vacation day to fly to Los Angeles, where he is met by his brother, and they drive four hours to Las Vegas, a popular destination for leisure travelers and therefore not often available on E-fares.
After two days of partying, they drive back to Los Angeles in time for St. John to catch the Monday-night red-eye.
Although no one seems to have kept score, airline officials say E-fares may have kindled or sustained almost as many romances as Cupid.
Six months ago, Dan Robbins, president of a computer consulting company in Linden, N.J., met his intended, a Seattle beautician named Tiffany Loboduk, through the Internet. Now he often uses Continental E-fares to be with her on weekends. "It's probably no more expensive to fly to Seattle than my phone bill would be if I stayed home," he said.
Patrick Donohue, newly engaged to Kristen Kenny of New Providence, N.J., was transferred to Milwaukee two years ago by his employer, Bacardi-Martini. At first, he flew home to see her as often as time and finances allowed, usually about every two months.
"She was soon fed up with that, so I might have lost her," he said. But after discovering E-fares, he flew home every couple of weeks. Now Donohue has been reassigned to Bacardi-Martini's office in Paramus, N.J., and he and Ms. Kenny plan to marry on June 19.
Many people, perhaps most, use E-fares mainly to visit family and friends. Geneva Tucker of Summit, N.J., flies Continental between Newark and Greensboro, N.C., about once a month to see her 16-month-old grandson and her daughter, Kerry Pearson, who attends the University of North Carolina at Greensboro. She gets back in time to attend a late-afternoon Monday class at the New Jersey Institute of Technology in Newark.
"The weekend schedule works out nicely," Mrs. Tucker said. "My daughter gets a little break, and my grandson doesn't forget who his 'G.G.,' Grandma Geneva, is."
Despite their popularity, E-fares do not lack for critics. Some complain about the paucity of seats to Boston, Miami, Orlando and other desirable cities in high seasons, while others say the short span between the posting of the week's destinations and the departures leaves little time to arrange for a day off or for the care and feeding of children or pets.
But without those limits, E-fares probably would not exist. "It's true that some markets like Boston and Florida show up rarely," said Ken Bott, manager of Internet marketing for Continental. E-fares, he pointed out, are for flights on which airlines have empty seats, "and we only have seats available when the rest of the universe isn't trying to go there."
Posting available flights sooner, airline officials say, could disrupt their systemwide price structure, which must accommodate a range of discounts, including 7-day, 14-day and 21-day advance purchases. Besides, Bott added, E-fares are focused on a very narrow subset of travelers -- those who have the time, money and desire to travel on weekends.
Some critics also say E-fares can be higher than promotional fares sometimes available through the Internet or through travel agents, and airline officials do not deny that this can happen occasionally, especially on flights to cities where demand for tickets is low. But such promotions are only short-term, while many E-fare destinations are offered repeatedly.
Stellwag, the analyst, said E-fares were also cheaper than those available from Priceline.com, where customers offer a price they are willing to pay.
Although he is an obvious fan of E-fares, Stellwag said some airlines understate their benefit to the bottom line. It costs about 9.3 cents a mile to fly one passenger, he said, and since the average flight is about 750 miles, the average cost per seat is roughly $70. "But airlines' E-fares average more than that," he added, "and they've increased about 20 percent since their inception, because demand has been huge."
For passengers, the cost of E-trips can still be substantial. Including air fare, hotel, transportation to and from the airport, rental car and meals, the Browns' 50-hour visit to Seattle cost them about $1,000. That is not inconsiderable, even in a household where both spouses work. Brown, 35, an accountant and financial planner, works for Buck Consultants of New York, conducting two-day seminars on retirement benefits for corporate employees.
Mrs. Brown, 30, who had taught elementary school in Argentina, sells cosmetics at the J.C. Penney store in the Queens Center Mall, not far from their one-bedroom apartment.
But they have no children and do not own a car. Their biggest indulgences, other than travel, are books and movies. And they agreed that the trip was worth the money, despite its brevity, because they had enough time in Seattle to visit its art museum and aquarium, dine at an upscale Asian restaurant, shop and take a 90-minute tour beneath the streets of a restored version of Pioneer Square. (The original was destroyed in the Great Fire of 1889.)
On the way back to the Seattle-Tacoma airport on Monday, they even squeezed in a visit to the Museum of Flight.
"It's been great," Brown said of the trip. "Every place we've been is as if I'm seeing it for the first time through Gladys' eyes."
And the United States has exceeded Mrs. Brown's expectations. "What I like most about it," she said, trying to dodge raindrops during a stroll to the Pike Place farmers' market, "is finding that most people here are so friendly."
That is doubly true of her husband, she suggested, as the couple took turns recounting how they met three years ago at O'Hare International Airport in Chicago. Because neither could speak the other's language, their friendship almost ended before it began -- until Brown dashed into a nearby bookstore, emerged with a Spanish phrase book and pointed to a sentence asking if she would join him for dinner.
Spontaneity, indeed.
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