United Joins Other Airlines in Boosting Discount Ticket Prices
United Airlines, the second-largest U.S. air carrier, Friday joined the industry’s move to higher discount fares, virtually assuring that the fares will not be rolled back.
Eastern Airlines also raised prices Friday to the level set Wednesday by American Airlines, the No. 1 U.S. carrier, and joined Thursday by Delta Air Lines, Continental Airlines, Pan American World Airways and Trans World Airlines.
USAir and Northwest Airlines were still holding out against the fare increases late Friday but were considered certain to match the industry’s new price level.
United said it had raised its prices on nonrefundable 14-day advance purchase tickets by an average of 5%.
Steeper increases were imposed on the seven-day advance purchase ticket category, and penalties for canceling them were doubled.
When one airline raises or lowers fares, competitors usually decide quickly whether to match the new price structure. If they decide not to change, the competitive pressure often forces the leader to pull back.
But this time, with most of the major airlines having said their fares will rise next Friday, it will be up to the traveling public to determine whether the higher fares remain in force.
“The big boys are all on board now (and) . . . it appears that the higher fares will stick,” said Hans J. Plickert, an airline analyst with the Transportation Group, an affiliate of New York-based Paine Webber investment firm.
‘Makes Economic Sense’
“But it now all depends on how the airlines read the tea leaves. It depends on what kind of reservation patterns they see for the next couple of weeks,” Plickert said. “Who knows? In two or three weeks they might institute some new promotional fares or rescind the hikes.”
Eastern spokesman Robin Matell said, “It appears that the adjustment makes economic sense at this time.” Eastern has been in Chapter 11 bankruptcy proceedings since March 9, and its pilots, flight attendants and machinists have been on strike since March 4.
Northwest and USAir both said that they would continue to study their options until next week.
