Fare war erupts as two more airlines offer discounts for flying in the fall

August 21, 1991|By Fort Worth Star-Telegram PfB

What began Monday as a regional skirmish between airlines escalated yesterday into a full-blown fare war when American and Delta said that they would offer discount prices after similar moves by USAir and United.

Travelers who delayed booking their fall flights in hopes of such a development now will have their patience rewarded.

The new discounts will be on sale through Oct. 31 and are good for travel between Sept. 4 and Dec. 15, with certain blackout dates around the Thanksgiving holidays. The discount fares are not refundable.

Typically, the discounts being offered range between 20 percent and 25 percent off the lowest fares that existed previously on most routes.

The new fares are less restrictive than the previous lowest fares. Instead of a required 30- or 21-day advance purchase, the new discount fares require only a seven-day advance purchase.

Terry Denton of Main Street Travel in Fort Worth, Texas, said the combination of lower prices and fewer restrictions will make it possible for more travelers to take advantage of the discount fares.

"By the nature of their travel [business travelers] don't have a lot of advance warning on their travel. So the reduction from 21 days to seven days' advance notice really will open those lower fares up to a wider range of travelers," Mr. Denton said.

"I think it'll be a stimulation, a much needed stimulation. We've made a big rebound since early spring when people just weren't traveling at all, no question about that. But I'd say [demand for air travel] has been soft for the past few weeks," he said.

The airlines hope their fall fare sale will attract enough passengers who would not have flown otherwise to offset the reduction in their yield -- the average amount of money they receive for flying one passenger one mile.

But if that doesn't work, the airlines -- which have lost nearly $7 billion in the past 12 months -- could bleed even more red ink.

In the past 12 months the U.S. airline industry has been battered by skyrocketing jet fuel prices in the wake of Iraq's invasion of Kuwait; a historically low demand for air travel during the Persian Gulf war; and a sluggish U.S. economy.

Since December, four large U.S. carriers -- Continental, Pan American, Midway and America West -- have filed for bankruptcy protection. In addition, Eastern Airlines ceased operations in tTC January after 34 months of operating under bankruptcy court protection.

Edward Starkman, an analyst with PaineWebber Group in New York, said the fare cuts had been widely anticipated on Wall Street. For that reason, few industry analysts think the nation's airlines will be able to recoup much of what they lost during the disastrous first half of the year.

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