Airlines to Raise Lowest Discount Fares

The nation’s biggest airlines said Tuesday that they are going through with previously disclosed plans to boost most of the lowest discount air fares and eliminate cheap fares booked shortly before a flight.

The changes, announced last week, would revamp the popular advance purchase “MaxSaver” fares used by most vacation travelers. They would also drop the so-called junk fares available four to seven days before a flight, which are used mainly by business travelers.

The changes were scheduled to go into effect at midnight Tuesday.

“At this point, everything looks go,” said Red Tyler, a spokesman for Northwest Airlines at its headquarters in Eagan, Minn.

The changes were initiated by Continental Airlines and quickly matched by the other big carriers, which were emboldened by strong recent growth in passenger traffic. Other carriers adopting the changes include United Airlines, American Airlines, Trans World Airlines and Delta Air Lines.

Fares Based on Mileage

Under the MaxSaver changes, fares for longer flights generally will be raised while those for shorter hauls will mostly be reduced. That means roughly two-thirds of the fares will go up, while the remainder will fall.

The new formula based on flight mileage replaces the airlines’ past practice of setting fares according to competition on individual routes.

The changes in MaxSaver fares generally range from a $20 reduction to a $40 increase on a round-trip ticket.

“We have been heavily inundated with phone calls,” said David Perelman, president of DMS Travel in mid-town Manhattan.

He noted that the demise of the last-minute junk fares means, for example, that a passenger flying from Newark, N.J., to Kansas City, Mo., would pay $296 round trip if he booked Tuesday on a three-day advance basis. But as of today, the cheapest round-trip fare for the same trip will be $757, Perelman said.

Some Holdouts

There are some exceptions to the changes. American Airlines, for example, said it won’t go along with them in those cities where it competes with Midway Airlines, a smaller carrier that didn’t match the changes.

Similarly, Texas Air Corp. subsidiary Eastern Airlines doesn’t plan to make the changes in the highly competitive market linking the Northeast and Florida. Delta will put off making the revisions in that market as long as Eastern does, said Delta spokesman Jim Lundy in Atlanta.

A substantial majority of discount fares will be adjusted, however.

Continental, another Texas Air subsidiary, customarily has been a pacesetter in cutting fares. But the stronger traffic has spurred it to switch directions.

The airline used to slash fares to attract more passengers, and its moves quickly were mimicked by the other big carriers in an effort to remain competitive. Now, Continental’s improving traffic has made it a leader in fare hikes rather than cuts, at least for the moment.

Airline analysts stress that the big test of the airlines’ strength will come in January and February, when passenger traffic is seasonally weak.