NEW YORK - American Airlines and four other U.S. carriers have matched Delta Air Lines Inc.'s lower fares, threatening to widen losses for the industry.
American, the world's largest carrier, cut fares as much as 55 percent and ended requirements such as Saturday night stays, the airline said yesterday.
Northwest Airlines Corp., United Airlines and Continental Airlines Inc. set comparable fares on Delta's routes, said Tom Parsons, chief executive of BestFares.com, a Web travel site.
US Airways Group Inc., of Arlington, Va., also said it followed Delta's fare cuts.
"Revenue throughout the industry is going to be lower than we thought," said James Corridore, a Standard & Poor's equity analyst. "This action is going to make the losses in 2005 even more severe than they would have been."
Airline stocks fell for a fifth day. Michael Linenberg, an analyst at Merrill Lynch & Co. Inc., said yesterday that airlines lowering fares may lose as much as $3 billion a year.
The five largest U.S. airlines in terms of miles flown by paying passengers are forecast to post losses for a fifth straight year in 2005, according to Thomson Financial.
Shares of AMR Corp., the parent of American Airlines, fell 30 cents, or 3.3 percent, to close at $8.75, and Northwest fell 16 cents to $8.44 on the New York Stock Exchange. Delta's stock fell 25 cents to close at $6.55, having tumbled 12 percent this week.
Continental Airlines declined 84 cents, or 7.4 percent, to $10.37. UAL, United's parent, is undergoing bankruptcy reorganization as is US Airways.
Airlines are adopting the lower fares to win back passengers lost to expanding low-fare rivals since 2001, Parsons said.
The 10 largest carriers lost $20 billion in the past four years because of the Sept. 11 terror attacks and as competition forced them to lower prices. Southwest Airlines Co. was the only carrier among the seven biggest in the United States to make money in 2004, analysts have forecast.
"It's a super major overhaul to the system," Parsons said of the fare changes. "By next Tuesday or Wednesday, 90 percent of the 48 states will have this new fare structure."
Airlines such as Southwest, the largest low-fare carrier, and AirTran control at least 50 percent of passenger traffic in 43 of the top 100 U.S. markets, according to a study by Intervistas, a consulting firm in Washington.
Delta, the third-biggest U.S. carrier, cut its U.S. fares by up to 50 percent, set maximum prices on coach and first-class tickets and eliminated requirements such as a Saturday-night stay to win back customers.
Carriers such as Southwest and JetBlue Airways Inc. are adding flights in cities where larger carriers pulled out to help stem losses.
American Airlines "broadly matched" Delta by reducing its highest fares and adopting fewer different fares on each flight. It did not cap fares at $499 in coach and $599 in first class, as Delta did, and will delay selling some seats until the day of departure to accommodate last-minute customers, said Scott Nason, American's vice president of revenue management.
"It will reduce industry revenue and our revenue somewhat in the short run," Nason said. "We believe matching Delta was a better answer than not matching Delta both for us and for our customers.
"In most markets, you'll find us selling a fare no higher than $699 one way."
America West Airlines said its fares were lowered March 2002. AirTran, based in Orlando, Fla., said it would have to raise its fares to match Delta's new levels.