PITTSBURGH -- US Airways' latest advertising ploy -- promoting
Usairways.com with the slogan "No booking fees. No brainer" -- is
drawing a yawn from retailers who charge service fees to earn a
living.
"Over the last nine years, I've become callous to this kind of
thing," said Jim Pekins, president of Gateway Travel Management in
Pittsburgh. "You raise an eyebrow, but you move on."
US Airways' goal is to lower distribution costs by doubling
consumer use of Usairways.com.
Pekins said that financially troubled US Airways is "searching
under every rock" to cut costs, but that promoting free booking on
its Web site is "such a small part of the equation."
Tony Maupin, president of Maupin Travel in Raleigh, N.C., also
said the new ad campaign is more desperate than strategic.
"It's a last-ditch effort to stay afloat," Maupin said. "I'd be
surprised if US Airways is still flying at this time next
year."
Airlines have been promoting their Web sites for years as a way
to reduce distribution costs, but the strategy hasn't worked,
Maupin said, because cost savings have been swallowed by yield
erosion, as the average ticket sold on the Internet is cheaper than
the average ticket sold at a travel agency.
That may be great for the consumer, he added, but not for the
airlines' revenue, which is already under downward pressure due to
fierce competition from low-cost carriers.
"There's aggressive pricing everywhere," Maupin said. "It's a
real challenge for US Airways."
US Airways' decision to promote a channel that yields less
revenue also leaves Pekins baffled.
"A long time ago, I quit trying to figure out the airline
business and focused on the travel-management business," Pekins
said.
To contact reporter Jerry Limone, send e-mail to [email protected].