American Cuts Air Fares to Fill Empty Seats
American Airlines on Wednesday cut fares on all of its routes--domestic and foreign--escalating a round of discounts in the industry that are designed to lure travelers back into the air after months of slow traffic because of the recession and the Persian Gulf War.
American’s action followed an earlier announcement by Delta Air Lines that it would cut 20% off one-way and round-trip fares usually purchased by business travelers. United Airlines had also begun offering coupons good for $50 to $100 off fares for certain flights.
On Wednesday, United, Delta and Northwest matched American’s broader cuts on competitive routes.
“This is a broad stroke to jump-start the marketplace,” said Michael W. Gunn, American’s senior vice president for marketing. “There is no secret that traffic has been weak. We are trying to generate traffic. We want to get people to travel again.”
Gunn said there recently had been “some uptick” in foreign travel for first-class and business-class seats. The domestic traffic had been slightly improved, he added, but was still “nowhere near expectations.” Traffic this month is still off considerably from the same period last year, he said.
The new cuts initiated by American are not as deep as in past fares wars, but travel agents were hopeful. “This is very good news,” said Thomas Nulty, president of Associated Travel in Santa Ana. “We are convinced that people are spending more money, and we want them to spend it on travel.”
American said tickets are on sale immediately and must be purchased before April 8, among other restrictions, for spring and summer travel. The new promotional coach fares for round trips of more than 2,001 miles during the period between April 8 and May 19 will be $318 for flights during off-peak hours and $358 for flights during the busiest travel times. During the period between May 20 and Sept. 30, fares will increase to $398 for off-peak hours and $438 for peak hours. Previously, the fares between Los Angeles and New York, for example, were $385 round trip for off-peak travel and $425 for travel during peak hours. Off-peak times are from noon Monday through noon Thursday.
Fares from Los Angeles to London will be $698 for off-peak periods and $798 for peak periods. They were $938 and $1,068 respectively.
Gunn said advertising for the new fares that began Wednesday morning had resulted in a rash of telephone inquiries at American’s reservation lines. It would end up as the airline’s “busiest day ever on the telephone,” he said.
In addition to the promotional fares for the spring and summer, American also said it would restructure its advance-purchase excursion fares into three categories. In so doing it will restore the 30-day advance-purchase fare that American initiated in the late 1970s but which disappeared in the mid-1980s. Since then, the industry has implemented variations of seven- to 14-day advance-purchase requirements. Alton J. Becker Jr., an American spokesman, said the 30-day advance-purchase fares will be as much as 65% off regular fares. The 14-day advance-purchase tickets will have discounts of about 50%.
“Putting the fares out there at a low level will generate enough additional business to help fill empty seats without giving the product away, “Becker said.
Other carriers said they were studying America’s planned fare restructuring.