DALLAS -- Northwest Airlines Inc. waved a red flag yesterday at industry leader American Airlines Inc., pledging to keep offering special discounts that American is trying to eliminate.
American is discontinuing all negotiated fares for businesses, conventions, meetings and other big customers. But Northwest president John Dasburg said his company wants to continue the practice. Mr. Dasburg, speaking to the National Business Travel Association in San Francisco, said high-volume customers deserve lower prices than they can now get with full-price coach tickets.
In remarks released by his company, Mr. Dasburg was sharply critical of American, which lowered coach fares about 38 percent in April as it eliminated the corporate discounts.
"One company has made it plain that . . . if we give a corporate discount, we will see the entire industry fare structure undercut to even more punitive levels," Mr. Dasburg said. "One company has made it clear that it will dictate price and terms to us and to you, now and most importantly, in the future," he said.
American spokesman Tim Smith said American does not plan to quit the corporate discounts. "The public has made it very clear that they do not like complicated fares that are not equal for everyone," he said.
Mr. Smith said the April price cuts brought American's average coach fare down to about the level of the negotiated discounts it was then offering. In effect, everyone now qualifies for the corporate discounts, he said.
The pre-April fare structure, which involved many more prices and various restrictions, "was too complicated and inequitable," Mr. Smith said. "Everyone felt like they were not getting the same deal. Smaller companies in particular felt it to be unfair. Our customers let us know they did not like the complexity and the inequity of the old system."