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Fares fly after reform: carriers testing $499 cap as published prices, corp. costs rise.

Article Excerpt
Many corporate purchasers today are paying more for tickets than they did at the beginning of 2005 when Delta Air Lines led the industry in reforming published pricing. For others, savings are apparent but not necessarily to the extent indicated by preferred carriers during contract renegotiations earlier this year. Even when excluding corporate discounts, changes to published business fare levels are difficult to assess--varying by fare type, market and carder in question--but recent data suggest fares purchased by many corporate travelers have risen steadily since January.

Nonrefundable airfares, for example, on average rose 13 percent from $204 one way in January to $230 in April, according to New York-based Harrell Associates, which measures fares across 280 top domestic routes. Nonrefundable air fares are favored by many companies and include alternate business fares that have certain restrictions, such as an advanced purchase and a minimum stay, but are more flexible than typical leisure fares. Continental's April average was highest at $256, while American's and Delta's increased most, both in excess of 30 percent. Conversely, unrestricted refundable business fares are down markedly from last year and somewhat from the beginning of this year--31 percent and 4 percent, respectively.

"Fortunately, the lowering of unrestricted fares had less of a dilutive effect than many expected," said American Airlines CEO Gerard Arpey in an investor's...

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