Northwest Air Cuts Some Fares by 25%

Northwest Airlines Corp. on Monday reduced by 25% some advance-purchase fares aimed at leisure travelers in an effort to revive passenger demand.

The airline cut its Every Day Deals fares and reduced the minimum advance-purchase period to 14 days before travel from 21 days. Northwest also offered options to boost the savings to as much as 50%, and expanded some business-fare discounts to include companies with travel contracts.

The changes were in the works before the Sept. 11 hijackings, Northwest said. Those attacks left travelers reluctant to fly and increased losses for U.S. airlines, which already were forecast to lose billion of dollars as demand declined and costs rose.

“There is going to have to be a series of other steps, including increased security, to get people traveling again, but this is one major step in the right direction,” said Ray Neidl, an ABN Amro analyst with an “add” rating on Northwest.

Separately, Northwest and other carriers reported declines in passenger traffic of at least 24% last month.

Miles flown by paying passengers fell 24% at Delta Air Lines Inc., and slid 34% at US Airways Group Inc., while falling 29% at Northwest and at UAL Corp.’s United Airlines.

October was the first full month after the attacks, and the figures reflect the full extent of lower demand for air travel, analysts said.

Northwest said its fare changes, which are effective immediately, probably will boost annual revenue by about 2% to 4%.

Under the new pricing, a one-way flight from Washington to Seattle during off-peak hours would cost $273, compared with $364 under the previous Every Day Deals fares.

“This seems to be a positive step for consumers, and the way they have handled this is interesting,” said Katie Connell, a spokeswoman for Delta, the third-largest carrier. “We have taken no action [to match the fares] at this time. I couldn’t speculate as to whether or not we would.”

AMR Corp.’s American Airlines, the largest carrier, said it hasn’t made a decision on the fares, and the second-biggest, United Airlines, expects to match some of them.

US Airways and Continental Airlines Inc. said they hadn’t matched Northwest’s changes.

Northwest shares rose 26 cents to $13.42 on Nasdaq. UAL fell 59 cents to $12.11, AMR rose 16 cents to $18.90 and Delta rose 58 cents to $24.58, all on the New York Stock Exchange.