American Increases Air Fares : Airlines: The move back to the ‘simplified’ system will boost prices by up to 20% on flights between L.A. and New York.
The topsy-turvy world of airline fares got another jolt Tuesday when American Airlines announced a fare hike that will raise ticket prices by up to 20% on flights between Los Angeles and New York.
American said the highest increases will be in about 1,000 markets, including Los Angeles to New York, reflecting a return to prices introduced April 9 when it unveiled its four-tier, “simplified” fare system.
Fares in all markets will rise at least 4.4% to partially offset an 11.2% increase in jet fuel costs since last winter, the Dallas-based carrier said.
American’s hike comes less than a month after the industry slashed vacation fares by 50%. The half-price promotion was followed by a 10% across-the-board fare increase that several airlines had planned to impose later this week. But American rejected that increase in favor of its own.
“The customers are so befuddled by the whole thing that I don’t think anybody will be surprised,” said Anastasia Kostoff Mann, president of Corniche Travel in West Hollywood. “It’s a very unstable atmosphere. They will wait until the last minute to buy a ticket.”
No other airline immediately matched American in its fare increase. But American will likely abandon the higher fares if the competition does not match them.
Most of the significant price increases will come on routes where American will restore prices to their Aril 9 levels. But American was forced to lower those prices in about 1,000 markets in response to fare cuts by other carriers.
Under the increase announced Tuesday, American’s cheapest round-trip fare between Los Angeles and New York rises from $400 to $480.
American’s announcement forced Northwest Airlines to postpone a 10% increase it planned to put into effect on Thursday until July 7. Continental, TWA and America West had said they will also raise fares by 10%.
But on Monday, America West dropped the increase after the nation’s three largest carriers--American, United and Delta--had failed to join the fare hike.
American said it was rejecting the Northwest fare proposal because some of the cheaper fares introduced by competitors were not fairly based on the distance flown.
“A 10% overall increase at this time, as others have announced, would only perpetuate the inequity inherent in such pricing,” said Mike Gunn, senior vice president of marketing at American. “We have elected instead to adhere to the principles of fairness and simplicity of the original value plan.”
This is not the first time American has used its power as the nation’s largest airline to influence prices.
Late last month, American cut vacation fares in half when Northwest offered adults a free ticket when accompanied by a child. American’s response was interpreted by many in the industry as a way of punishing Northwest for trying to undermine the new price system.
The fare wars, cuts and increases that have occurred since American created the simplified fare schedule in April has confused even industry veterans.
“Fare simplification was the wrong name for the thing American did on April 9,” said Thomas Nulty, president of Santa Ana-based Associated Travel. “Things are not simple at all. I have never seen so many changes in all my years in the business.”
Price-Fixing Facts
Consumers who qualify for 10% discounts on air travel under a settlement of an airline price-fixing case might find the claims process more trouble than it’s worth.
There is skepticism over whether the paperwork is worth the ultimate discount, especially considering that the average domestic round-trip fare is $240--which would qualify a traveler for only a $24 discount on the next ticket purchased.
USAir, American Airlines, Delta Air Lines and United Airlines announced Monday that they will spend about $400 million to settle a 2-year-old antitrust suit charging that they engaged in price-fixing on tickets purchased by an estimated 10 million travelers.
Under the settlement, those who bought tickets between Jan. 1, 1988, and June 30, 1992, can receive coupons for 10% discounts on future travel. They must have passed through one of 34 specific airports, however.
The settlement still must be approved by a federal judge in Atlanta, who is unlikely to decide before October, leaving potential beneficiaries in limbo over how to file claims.
Here are the airports in the settlement. Fliers who think they might qualify should write to Airline Antitrust Litigation, P.O. Box 209, Philadelphia, Pa. 19107.
Atlanta, Baltimore, Boston, Charlotte, Chicago (O’Hare), Chicago (Midway), Cincinnati, Cleveland, Dallas-Ft. Worth, Dayton, Denver, Detroit, Houston (IAH), Indianapolis, Kansas City, Los Angeles, Memphis, Miami, Minneapolis-St. Paul, Nashville, Newark, New York (LaGuardia), New York (Kennedy), Orlando, Philadelphia, Pittsburgh, Raleigh-Durham, Salt Lake City, San Francisco, San Jose, St. Louis, Syracuse, Washington (Dulles), Washington (National)
Source: Associated Press
Rising Air Fares
American Airlines wants to raise its round-trip, 14-day advance ticket purchases from Los Angeles to New York to $480 as of July 7. Below are where fares stand now.
Airline Fare American $400 America West $400 Continental $380* Delta $400 Midwest Express $370 Northwest $380* TWA $400* United $380 USAir $380
* Must be ticketed by today.
Source: Travelmation
