America West Fires a Big Salvo in the Airline Fare Wars

The intensity of fare wars in the airline industry gained strength Wednesday as America West Airlines dropped ticket prices by 50% in an unheard-of three-day sale.

The Phoenix-based airline said the discount would apply to any one-way fare of $50 or more, including its already discounted advance-purchase fares. The sale begins today and ends Saturday.

The promotion is the most dramatic yet in an industry that has tried to lure reluctant passengers with bonus tickets, first-class upgrades and triple miles. The carriers are suffering record losses because of fears of possible terrorist attacks stemming from the Persian Gulf War.

“The nation’s economy has been in limbo since the beginning of the Middle East crisis, and we intend to give America a reason to get moving again,” said Mark Coleman, senior vice president for sales and product development.

The lowest round-trip fare for Los Angeles-Denver would drop to $167 from $333, while the cheapest fare for Orange County-New York--with stops in either Phoenix or Las Vegas--would drop to $252 from $504.

During the three-day special, the lowest round-trip fare from Orange County to Seattle would drop from $352 to $126, while the cheapest Orange County-Phoenix fare would drop from $109 to $54.50.

America West flies out of John Wayne Airport in Orange County five times a day to Las Vegas, seven times daily to Phoenix and eight times daily to San Francisco.

The round-trip advance-purchase fare for the Los Angeles-Honolulu route would drop to $230 from $459.

Tickets are non-refundable and good for travel through Jan. 5, 1992.

It wasn’t clear whether other airlines would jump into the fray with their own half-price sales. Spokesmen for American Airlines and Delta Air Lines, which compete with America West on some southwestern destinations, said they were studying the situation.

“If we respond it would be on a selective basis, since we only compete with them on a limited number of routes,” the Delta spokesman said.

It was widely expected that Southwest Airlines, the Dallas-based no-frills airline, would respond to America West’s sale. The two airlines have been duking it out in a heated battle for market share in Phoenix. The last big battle came last fall, when Southwest drastically cut fares outside Texas as part of an anniversary sale. America West countered with a one-day half-price sale at the Phoenix airport. The airline sold 100,000 tickets that day--five times what it expected.

An America West spokesman said it didn’t know how many people might buy the half-price tickets this time. “Even if a half-million people buy them, that is still a small part of the total passengers that fly in one year,” airline spokesman Dik Shimizu said.

Observers speculated that America West, which lost $74.7 million last year, might be holding the sale to raise cash quickly. Continental Airlines held a similar “Mother’s Day” half-price sale in 1983 amid financial woes.

Shimizu dismissed suggestions that America West needs cash, saying that it had more than $100 million in cash on Dec. 31. “I’m not saying we’re sitting pretty, but this is definitely a far cry from desperation,” he said.

Times staff writer Anne Michaud contributed to this report.