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Alaska Air cuts prices, eases some restrictions

By Dominic Gates
Seattle Times aerospace reporter

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The Seattle-based carrier will announce today new fares that will reduce the price difference between most advance-purchase coach and first-class fares and remove many ticket restrictions.

Alaska, like other carriers, has had fare sales through the industry downturn, but passengers have been frustrated by a Byzantine pricing system typical of the major airlines.

"The pricing structure that has evolved over the industry's 75 years has gotten to the point where it's impossible for customers to understand," said Gregg Saretsky, executive vice president of marketing and planning for the airline.

Alaska hopes the new fares will make finding the best value less hit-and-miss and encourage travelers to pay for somewhat more expensive seats rather than turning away from those that cost a great deal more.

"In 2003, we had our airline network on sale for 40 out of 52 weeks," Saretsky said. "It's been difficult to get consumers to pay anything but the very lowest on-sale price. That was a big clue that we needed to restructure the fares."

In the simplified fare structure, there will be around six ticket prices available on any route, and the premium on short-notice tickets will be slashed.

First-class fares from Seattle to Newark, N.J., will be cut 29 percent; from Seattle to Los Angeles by a third.

While some tickets still require a single-night stay, many restrictions are dropped, including maximum stay limits and requirements for a Friday or Saturday night stay.

Typically, Alaska offers low fares on routes where it competes directly with discount airlines and charges more on routes with no direct competition.

That strategy will remain: It will still cost more to fly nonstop from Seattle to Los Angeles on Alaska than indirectly on Southwest.
 
But the change in fare structure applies across Alaska's network, including such routes as Seattle-to-Anchorage and those within Alaska, where it doesn't compete with discount carriers. A first-class ticket from Seattle to Anchorage will be cut 24 percent.

Saretsky said that the pricing changes may reduce revenue in the next few weeks until people become aware of the new opportunities. The company is beginning an ad campaign to inform the traveling public. By the end of the quarter, Alaska expects no effect on revenue; in the long term, it hopes the changes will bring in more customers.

Because few people paid the full maximum fares in the old structure, the changes may make less difference in actual fares paid and be more important psychologically.

"They're eliminating fares that nobody paid and in the process simplifying the fare structure, which makes people feel they are getting their money's worth," said Ray Neidl, an industry analyst with Blaylock and Partners. "If it's done right, in the long term, it should help the carrier. The consumer wants simpler fares."

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

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