P.M. BRIEFING : Airline Fare War Gets Hotter as United Matches TWA Cuts
United Airlines today escalated its scramble for summer vacationers’ dollars, saying it will match TWA’s deep fare cuts.
The lure of a larger share of the vacation travel market was leading the nation’s big airlines this week to break with tradition and discount some of their domestic ticket prices during the busy summer season.
The latest air fare war began when United placed newspaper advertisements on Monday containing coupons good for $35 off round-trip tickets of $175 or more.
A day later, Trans World Airlines cut some of its domestic round-trip fares by up to 30%, and American Airlines, Delta Air Lines, USAir and Continental Airlines announced Wednesday they also were lowering their ticket prices.
Today United, which said it had offered the coupons only in response to promotions by some of its competitors, said it was also matching the TWA reductions.
Industry analysts say that so far, the fare cuts pose little danger to the companies’ earnings.
“There are some diminishing returns as far as profitability, but you don’t give up market share to someone else,” said Paul H. Nisbet, an analyst with Prudential-Bache Securities Inc.