Looking for a Fare Shake : Travel: The L.A.-Bay Area ticket price war helps vacationers, who can book far in advance, but corporate fliers chafe at the restrictions.


The way frequent flier Stan Spiegel of San Francisco sees it, the current round of ticket discounting in the busy California air corridor puts fares down where they should be--finally.

"The high fares are a rip-off," said Spiegel, an importer and manufacturer of kitchen linens and bed sheets who got exasperated when the short hop to visit his Los Angeles customers soared to $300 round trip. "You can go to New York cheaper than Los Angeles."

Knowing that the respite will probably be short-lived, Spiegel plans to take advantage of a fare war that started early this month when airlines matched no-frills newcomer Southwest Airlines' $58 round-trip fare on the Burbank-Oakland route. That is, he'll take advantage of it to the extent that he can as a business traveler, given the heavy restrictions on the cheap seats and his need to travel often on a moment's notice.

For the most part, Spiegel angrily maintains, he'll be stuck paying full freight as usual and subsidizing vacation travelers.

One might assume that an all-out fare war in the heavily traveled Bay Area-Southern California corridor would be a cause for celebration, and leisure passengers, who can plan getaways well in advance, are indeed applauding it.

But others--notably business travelers and travel agents--contend that the fare war is confusing and promotes distrust in airlines by making travelers skeptical that fares are ever really fair.

For now at least, passengers who book and pay for flights three weeks in advance, avoid traveling on a Friday or a Sunday and don't mind forgoing a refund if their plans change can fly for $29 each way from any Bay Area airport to any Southern California destination. A wide variety of less restrictive, higher--but still relatively low--fares can be had closer to departure dates.

"One day it costs a fortune, and the next day they're giving it away," said Holly Huebel, co-owner of Holly Travel Associates in San Francisco. "I could well understand if the general public doesn't understand it."

Passengers say the discounting recalls the kind of free-wheeling competition that prevailed back when Pacific Southwest Airlines of San Diego, Newport Beach-based AirCal and other regional carriers flew the route--before they got swallowed up by bigger players.

In those days, passengers could rely on frequent price skirmishes; round-trip fares of $99 were common, with one-way tickets occasionally dropping as low as $19. But the bloody fare wars also took a toll on the carriers.

PSA, for one, suffered losses every year from 1979 on, making it vulnerable to a purchase by USAir in 1987. About the same time, American Airlines bought AirCal, and Delta took over Los Angeles-based Western Airlines.

After the mergers, prices rose. Airlines justified the higher fares by citing rising fuel costs and the cost of buying and maintaining jets.

But many passengers contended that, with the exception of scattered promotional fares, prices stayed stubbornly and artificially high. In recent months, discount round-trip fares of $145 were available in the market, but the full, unrestricted fare was a whopping $372.

Once Southwest entered the corridor in April, however, other airlines went on the offensive to try to keep regular business passengers from deserting to the upstart. (Southwest also consistently came in low with an unrestricted $59 one-way fare on its Burbank-Oakland route.)

On the San Francisco-Los Angeles route, the corridor's most popular, United went to half-hourly service from hourly service. All told, United has 120 flights each business day between the Bay Area and Southern California, up from 38 in 1988.

USAir added a dozen round trips each day in the corridor. On June 1, Delta swept in with hourly flights.

Airlines also began tempting passengers with free newspapers, more convenient gates and mileage bonuses for members of frequent-flier programs. Delta even installed facsimile lines and computer hookups for business travelers in its airport terminals.

But ticket prices held firm until July 3, when United, Delta, USAir, American and Alaska matched Southwest, the Dallas-based carrier that serves no meals and provides seats, even for passengers with reservations, on a first-come, first-served basis.

"It was inevitable it would turn into a fare war because of all the metal they have flying between the two cities," said Bob Wisse, president of Getz International Travel, a San Francisco agency.

By his firm's estimate, there are now more than 500 flights each business day in the corridor. With an average of 120 seats per flight, that means airlines must try to fill 60,000 spots each day. Estimates of total number of riders in the corridor vary widely--from 2.2 million to 8 million a year. Meanwhile, industry analysts estimate that carriers in the corridor are flying only 30% to 35% full these days between San Francisco and Los Angeles.

The over-capacity "doesn't make a whole lot of economic sense," acknowledged Greg Witter, a spokesman for Alaska Airlines. "Somebody will have to fall out of that market."

Edward J. Starkman, an airline industry analyst with the Paine Webber investment firm in New York, said: "There are just too many seats. I can't imagine that anybody will break even at those fares."

It's no wonder, then, that airlines are trying to tempt leisure travelers to fill seats that otherwise would remain empty during the summer months, when business travel tapers off--even if it means selling tickets at a loss.

Robert J. McAdoo, an analyst with Oppenheimer & Co. in New York, said American Airlines has indicated that the fare war in the California corridor will cost it about $2.5 million a month--a small amount compared to its $11 billion in annual revenue but enough to cause concern among investors.

As welcome as the fare war is to many leisure travelers, the helter-skelter fare game is a source of frustration and confusion for business travelers and agents.

"The 21-day advance purchase is ridiculous," said George Koster, a free-lance events producer who commutes between San Francisco and Los Angeles. "It doesn't do the business traveler any good."

Natalie Lewis, a consultant with Unravel Travel in San Francisco, agreed that the lower fares just don't help business people who learn about out-of-town meetings at the last minute. And airlines aren't disposed to make it easy for full-fare business travelers, their bread and butter, to take advantage of discounts.

"It's useless and very upsetting for business people who have to leave tomorrow," Lewis said. "I hear people screaming."

Nonetheless, some companies put pressure on employees to get the best fares, even if it means driving an hour or two to appointments from an out-of-the-way airport. One executive at a large corporation threatened to fire the company's travel agent if he caught him sending an employee on a more expensive ticket for the sake of convenience.

One man keeping a close eye on fares is state Sen. Art Torres (D-Los Angeles). Last spring, Torres, who is particularly miffed about hefty fares from his home town to Sacramento, floated a bill that would have created a state-owned airline called Golden State Air. Largely taken as a joke by the airline industry, which nicknamed the proposed airline Califlot, the measure nonetheless garnered a bit of support before being shot down by legislators.

Torres, according to press secretary Peter Blackshaw, views the fare cuts as a heartening but undoubtedly temporary phenomenon.

"It's always temporary, and before you know it, you're paying $300 again," Blackshaw said. Torres, he added, intends to introduce the bill again next year.

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