Travel budgets feel squeeze; rising airline prices force cost cuts - includes related article

Travel budgets feel squeeze

Stamford, Conn.--Recent increases in airfares are stepping up publishers' efforts to hold the line on travel and entertainment costs, and many are using loopholes in ticket regulations, unheard of a few years ago.

Led by Texas Air Corp. (the largest single U.S. carrier and owner of Continental and Eastern), many airlines eliminated discounts on tickets sold three and seven days before the trip. For example, Continental's lowest available fare from Chicago to Los Angeles rose from $208 in early November to $298 on November 17. A trip from New York to Los Angeles, as low as $178 last year, doubled to $358.

The three- and seven-day discount tickets were bought by roughly one-third of all commercial travelers, according to Harold seligman, a travel management consultant based in Stamford, Connecticut. Many publishers have added 10 percent increases to travel budgets because of higher air fares, reports Ivan Inerfeld, partner in Coopers & Lybrand, certified public accountants.

Meanwhile, editors and publishers of travel-related magazines at Gralla, Murdoch and Fairchild Publications say such developments intensify the trend toward active travel management.

A practice now common at many magazines, for example, is to ask employees to book flights with penalties. Even if plans change and a ticket is occasionally wasted, total costs remain below the price of full-fare tickets, publishers say.

Magazines should also contract with their travel agencies to provide lowest airfare available, says Jane Edelstein, publisher, Corporate Travel. Audits can enforce such agreements, she says; publishers can also require agencies to get management approval if an employee wants a higher fare, adds Alan Fredericks, editor in chief of Murdoch's Travel Weekly.

More agencies are willing to do that, but only if agency and management agree on priorities, says Ellie Baumwald, co-owner of Travel Resources, an agency in Eastchester, New York. Price is frequently not the only consideration. "Some people want to know they'll get there on time. Then there are the frequent flyers."

To help, written travel policies that tell employees how to book flights have become the norm, Edelstein says. In addition, she encourages employees to get airline information early in their trip-planning, and to arrange business, to some extent, around flight times instead of the other way around.

How long before high prices come down? Perhaps as soon as this month, predicts Seligman. In some markets served by competing or smaller airlines, he notes, the increases were reduced or never took effect. Continental's price from Chicago to Orlando--a hotly competitive market--returned to $198 after Christmas after soaring to $258 after Thanksgiving.

"My guess is that someone told Frank Lorenzo [Texas Air's chairman, CEO and presidenth, 'We've sold all the seats we expected to sell between Thanksgiving and Christmas; if we raise the price, we've got nothing to lose.'"

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