Several Airlines to Hike Summer Discount Fares

Several U.S. airlines, led by Continental, will raise some of their discount fares by as much as $80 round trip, indicating that travelers may be in for another general round of fare hikes.

Continental said late Thursday that it will increase most of its discount fares by $20 to $80 a round trip in time for the heavy summer travel season. The increases, which were matched by Braniff, TWA and America West, apply to round-trip tickets with advance purchase requirements. The fare hikes take effect on reservations made after May 27.

Meanwhile, American, United, Delta, and USAir said they were studying Continental’s move but had not decided whether to increase their fares. If such major carriers do not go along with the increases, observers said, Continental and the others may be forced to roll as least some of them back to remain competitive.

Vacation Travelers

The increases will primarily affect vacation travelers who often book flights in advance. Continental, based in Houston, is not raising its unrestricted fares, used mostly by business travelers, “at this time,” a spokesman said.

Continental said both its MaxSaver fares and its excursion fares were affected by the hikes. The MaxSavers require ticket purchases as much as two weeks in advance, a Saturday night stay and are non-refundable. The excursion fares, which cost more, require a seven-day advance purchase and carry a 25% cancellation penalty.

Continental is not raising its fares on the highly competitive Newark, N.J.-to-Washington route or on a number of routes where it competes with low-fare Southwest Airlines.

Continental said it is raising ticket prices because there is a strong demand for air travel. “The summer is the busiest period in the airline industry, and this adjustment is typical for this time of year,” said Ned Walker, a Continental spokesman.

Analysts said fare hikes in the airline industry are justified by increased fuel and labor costs. In addition, the analysts said, most airlines have placed large orders for expensive new aircraft.

Another reason for the increase is that the strike at Eastern Airlines has idled that carrier’s fleet, increasing the demand for seats on other carriers, said William Whitlow Jr., an airline industry analyst with the Dain Bosworth investment firm in Seattle.

Air fares have been rising generally for several months. In January, most U.S. airlines, led by American, raised their excursion fares in 40 markets by $20 to $40 per round trip in response to unusually strong demand for air travel. Also in January, the airlines that fly within California raised their unrestricted fares by 15%, amid an outcry from business travelers.

Some airlines might hesitate to match Continental’s fare hikes because travelers are still upset over the last round of increases, said Edward J. Starkman, an airline industry analyst with the Paine Webber financial firm in New York.

“There is an unexplained strong demand for air travel that provides an incentive for fare increases,” he said. He said competitors might match Continental’s fares in “selective markets,” rather than across the board.

Despite the steady round of hikes, travel agent Jerry Steinberg said he did not think travelers would be discouraged. “We’ve had a strong demand,” said Steinberg.

CONTINENTAL’S NEW RATES

Current Maxsaver fares and those for reservations made after May 26. For flights originating in Los Angeles to selected destinations.

OFF-PEAK HOURS PEAK HOURS Current After May 26 Current After May 26 To Denver $238 $258 $278 $298 To Chicago $298 $318 $338 $358 To Ft. Lauderdale $358 $398 $398 $438 To Newark $358 $398 $398 $438 To Houston $278 $298 $398 $438